Q4 2024 Treace Medical Concepts Inc Earnings Call
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Speaker Change: Welcome to the <unk> medical concepts fourth quarter 2024 earnings conference call.
At this time all participants are in listen only mode. After.
Speaker Change: After the speaker's presentation, there will be a question and answer session.
To ask a question. During this session you will need to press star one one on your telephone you would deem here an automated message advising your hand is raised.
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Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Vivian Cervantes Investor Relations Gilmartin Group. Please go ahead.
Speaker Change: Thank you.
John: Good afternoon, everyone and welcome to our fourth quarter 2024 earnings conference call participating from the company today will be John <unk>, Chief Executive Officer, and Mark hair, Chief Financial Officer during.
John: During the call John will offer commentary on our commercial activities.
John: All led by Mark for a review of our fourth quarter financial results released after market close today.
John: We will host a question and answer session following our prepared remarks.
John: Our press release can be found in the Investor Relations section of our website at investors not treat dot com.
John: This call is being recorded and will be archived in the investors section of our website.
Before we begin we would like to remind you that it is our intent that all forward looking statements made during today's call will be protected under the private Securities Litigation Reform Act of 1995.
John: Any statements that relate to expectations or predictions of future events and market trends as well as our estimated results or performance are forward looking statements.
John: All forward looking statements are based upon our current estimates and various assumptions.
John: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated.
John: Or implied by these forward looking statements.
John: All forward looking statements are based upon current available information and treat medical assumes no obligation to update these statements.
John: Accordingly, you should not place undue reliance on these statements.
John: Please refer to our SEC filings, including our Form 10-K for the full year 2024 filed after market close today.
John: It can be found in the Investor Relations section of our website at investors Dot <unk> dot com for a detailed presentation of risks.
John: With that I'll now turn the call over to John.
John: Thank you Vivian and good afternoon, everyone and thank you for joining us on our fourth quarter 2024 earnings conference call.
John: We closed out 2024 and started 2025 on firm footing with a clear focus on executing on our agenda to comprehensively address the evolving needs of surgeons and patients with an expanding portfolio of innovative best in class finding solutions.
John: With our growing base of over 3100 surgeon customers, representing a ready audience for our growing suite of technologies delivered by our expert opinion focused sales team, we aim to accelerate our penetration into the 450000 Bunion cases performed annually in the U S.
John: Since our inception, we've worked in close partnership with surgeons to understand and serve the large unmet needs in the bunyan market. In fact in 2018, our surgeon Advisory Board published a peer reviewed paper describing for different classes of bunion deformities, which included milder deformities deformities that are more severe in nature findings with a coexisting.
John: For many of the mid foot and Bunions, which are coexisting arthritic, Greg tow joint.
John: When it comes to addressing bunions across a broad spectrum of bunion classes are patented lap a classic system leads the way in both market position and innovation with over 120000 patients treated since late 2015 and has become the dollar share leader in the U S funding market today.
John: This said, it's been our long term strategy to expand our business by addressing all for the bunyan classes with a portfolio of innovative solutions, giving surgeons a broader spectrum of specialized options to address the needs of these patients.
John: A key tenant of our product innovation strategy is to make our flagship procedures less invasive, which we believe translates to less pain and quicker recovery for the patient and.
John: And not only makes our procedures more attractive today, but we believe over time can extend our reach up funnel and appeal to a larger portion of the $4 4 million Americans, who seek medical attention for their bunions each year.
John: Accordingly, we've innovated our flagship <unk> instrumentation and implant technology three times now over the last several years.
John: Reducing the required incision size by over two thirds during that period and.
John: And today <unk> it can be performed through a discrete two centimeter incision with our latest micro lap of flash the option.
John: Building on our strategy to serve all four bunion classes with disruptive specialized solutions in late 2021, we introduced a Dr. <unk>, the first and only instrumented system empowering surgeons to reproducible correct class opinions with a coexisting deformity of the Midfoot known as metatarsus ductus.
John: As a reminder, this subsegment of patients is significant with this mid foot deformity present in up to 30% a bunion patients.
John: And in our drive to deliver less invasive approaches. We recently introduced many of Dr. Plassey, which allows the procedure to be performed through a 50% smaller incision leveraging our speed played implant technology.
John: And for the milder class of Bunions, while <unk> is used by many of our surgeon customers as their go to procedure of choice. There are many surgeons, who prefer metatarsal osteotomy used to treat most patients within this class.
John: As a reminder, metatarsal osteotomy comprise an estimated 70% of the bunyan surgical cases today.
John: And for these surgeons minimally invasive osteotomy represent the fastest growing sub segment.
John: So to broaden our procedure solutions and appeal to the preferences of these surgeons and their patients. We recently introduced two new and differentiated three D osteotomy systems.
John: For background, we estimate around 10% to 15% of all metatarsal osteotomy today are being performed with minimally invasive or mis approaches and.
John: And we believe that the biggest limiter to broader adoption of the MSR. The army is the technical difficulty and steep learning curve associated with conventional freehand techniques.
John: For example, surgeons, who teach these techniques talk about a 40% to 50 case learning curve to become proficient in doing them.
John: We see this as a ripe opportunity for trees to change the landscape and allow Mrs. Osteotomy used to be performed by a broader base of surgeons with control and confidence effectively democratizing. These once challenging operations just as we've done and continue to do with our market, leading <unk> and a doctor flashy procedures.
John: Our approach to Miss Osteotomy is consistent with our philosophy of anatomic three planed bunion correction in order to achieve the most enduring patient outcomes possible.
John: And offering user friendly instrumentation designed to make these complex procedures controlled reproducible and faster for the surgeon.
John: Our two new <unk> Mis osteotomy offerings are both performed through very small cosmetically appealing decisions, which we believe can result in less pain and quicker recovery for the patient.
John: Our first system Nana Plassey offers a controlled instrumented three plane procedure and importantly utilizes the familiar powered sorry to cut the bone as opposed to a powered rotary cutting <unk>, which is used for most <unk> today and is known for a steep learning curve.
John: For fixation nano classy utilizes a titanium intramedullary implant with locking screws to support early weight bearing and stability during healing.
John: Our second Mis platform Perky philosophy is designed to be the new standard for surgeons, who already use the conventional approach to most msr's the automation.
John: Namely a less instrumented essentially freehand procedure using the powered cutting bird cut the bone and two screws for fixation.
John: As with Nana Plasty, Perky, plassey delivers elegant instrumentation to deliver greater control confidence and consistency of results.
John: Allowing the surgeon to effectively dial in the important three plane correction that <unk> pioneered and is known for.
John: For fixation Perky Plaza uses two of our next generation titanium screws to provide stability during healing.
John: And we round out our comprehensive portfolio with a new and innovative solutions for a sizable segment of bunion patients with a coexisting arthritic, great toe or MTP joints.
John: This class of Bunions is treated at the tow joined itself typically by fusing that joined.
John: Targeting this patient segment, we recently introduced our speed MTP system in a limited market release.
John: Speed MTP combines our market, leading speed play compressing fixation technology with additive locking screws to provide surgeons with a unique new option for MTP fusion surgery.
John: This is an implant design that is extremely low profile and highly stable to support early weight bearing for these patients.
And as its name indicates it's also very fast for the surgeon to implant.
John: As we've stated in the past we estimate that we have captured about 25% on average of our 3100, plus surgeon customers annual bunion procedures with our market leading <unk> solution.
John: And offering these new specialized technologies targeting preferences of our surgeon customers and patients across all four blending classes. We believe we are dialed in to maximize our share capture of the remaining 75% of their cases.
John: We're experiencing very positive early responses on these four new technologies from both existing and new tree surgeon customers we.
John: We expect to ramp availability of these new offerings progressively through the first half of the year with increasing revenue impact expected in the back half as we build our supply and train more surgeons.
John: Turning to the quarter fourth quarter revenue was $68 7 million, representing 10, 4% growth over the fourth quarter of 2023 and at the top end of our previously announced preliminary Q4 results of $68 4 million to $68 8 million.
John: This growth was fueled by continued commercial execution and driven by product mix shifts that resulted from increased adoption of newer technologies such as Dr. <unk> and <unk> continued strong demand for our other complementary product offerings increases in active surgeon users in the quarter and some slight contribution from our limited market releases of <unk>.
John: Microsoft's be plate perky, plassey as well as early surgeon access to our <unk> technology.
John: We expect full inventory levels for these new products as we enter the back half of 2025.
Turning now to reimbursement.
As we previously announced CMS significantly increase material reimbursement for CPT code 200, <unk> hundred 97, the co predominantly associated with lapidus fusion or lap a classy procedures in both the hospital outpatient and ASC settings effective January of this year.
John: While certainly a positive development, it's still very early in the year and too early for us to assess the impact we're monitoring our customer base and we will update you on trends, we see as we progress throughout the year.
John: Turning to our financial outlook.
John: We are initiating our full year 2025 revenue guidance of $224 million to $230 million, which reflects an expected increase of 7% to 10% over 2020 for revenue.
John: For the full year 2025, we expect breakeven adjusted EBITDA.
John: We feel good about our setup for 2025, while continuing to drive our market, leading <unk> Dr supply chain speed played offerings deeper into the market. Our sales team is excited to deliver this broader portfolio of highly specialized technologies to our ready and captive audience of over 3100 active surgeon customers.
John: We believe our robust portfolio of best in class instrument solutions targeting all four classes of Bunions puts us in a unique and powerful position to extend our market leadership and execute our strategy to speed penetration in the overall bunion and related mid foot markets.
Mark: Let me now turn the call over to Mark to review our financial performance Mark.
Mark: Thank you John Good afternoon, everyone revenue in the fourth quarter was $68 $7 million, an increase of $6 5 million and 10% over the prior year period growth was driven by a product mix shift increased adoption of our newer technologies and the increase in bunion procedure kits sold and active surgeons.
Mark: For the full year 2024 revenue was $209 4, million% to 12% increase over 2023 and at the top end of both our pre announced revenue expectation of $209 million to $209 4 million and our prior 2020 for revenue guidance range of $204 million.
Mark: To $211 million.
Mark: Gross margin was 87% in the fourth quarter of 2024 compared to 81, 6% in the fourth quarter of 2023 for the full year 2024 gross margin was 84% compared to 81, 2% in 2023. The change in gross margin was driven by product mix shift to <unk>.
Mark: Product innovations and the increase in inventory provisions, partially offset by lower royalty rates.
Mark: Total operating expenses were $55 7 million in the fourth quarter of 2024 compared to $57 5 million in the fourth quarter of 2023. These reductions reflect continued execution on our expense management initiatives.
Mark: For the full year 2024, operating expenses were $224 million compared to $203 4 million in 2023.
Mark: The increase in full year operating expenses reflect increased stock based compensation expense investments in product innovation and support for other corporate initiatives.
Mark: Fourth quarter net loss was zero point $5 million or <unk> <unk> per share compared to a net loss of $6 3 million or <unk> <unk> per share in the fourth quarter 2023.
For the full year of 2024 net loss was $55 7 million or <unk> 90 per share compared to a net loss of $49 5 million or <unk> 81 per share in 2023.
Mark: Adjusted EBITDA for the fourth quarter was $11 1 million compared to $2 6 million in the fourth quarter 2023, an improvement of 322%.
Mark: For the full year 2024, adjusted EBITDA loss was $11 million compared to a loss of $24 4 million in 2023, an annual improvement of 55%.
Mark: Cash cash equivalents and marketable securities were $75 7 million as of December 31, 2024, including access to an additional $26 million of cash to our existing revolver the balance of cash cash equivalents and marketable securities will be approximately $102 million as of the.
Mark: <unk> 31 in 2024, we believe our balance sheet strength and flexibility is sufficient to continue effectively executing on our strategic investments and growth initiatives for the foreseeable future before concluding let me turn our outlook for full year 2025.
Mark: As John mentioned, we are initiating our full year 2025 revenue guidance of $224 million to $230 million, which reflects an expected increase of 7% to 10% over 2020 for revenue. In addition, we expect breakeven adjusted EBITDA for four for full year 2025, and expect our COO.
Mark: Cash burn to decrease by approximately 50% for full year 2025 versus 2024 with that let me turn the call over to the operator to open the line for your questions.
Mark: Thank you.
At this time, we will conduct a question and answer session. As a reminder to ask a question you need to press star one one of your telephone and wait for your name to be announced.
Mark: To withdraw your question. Please press star one again.
Mark: Please stand by while I compile the Q&A roster.
Speaker Change: Our first question comes from Ryan Zimmerman from BTG. Please go ahead.
Ryan Zimmerman: Good afternoon, thanks for taking our questions guys.
Ryan Zimmerman: I wanted to I want to start with guidance for a bit.
Ryan Zimmerman: And talk about the cadence.
Ryan Zimmerman: Through the year you have arguably you are.
Ryan Zimmerman: Toughest comp in the first quarter.
Ryan Zimmerman: And so.
Ryan Zimmerman: You could kind of give us your thoughts about pacing through the year.
Ryan Zimmerman: Will revenue.
Ryan Zimmerman: I'll just ask it upfront would be down in the first quarter 2025, just given the seasonality and then should we think it kind of accelerates linearly through the balance of the year, we'll start there.
Mark: Hey, Ryan this is mark thanks for the question yes.
Speaker Change: First of all let me just say that we're really pleased with the fourth quarter results.
Speaker Change: Our sales team.
Speaker Change: Grew our topline and how R&D is provided a lot.
Speaker Change: Newer technologies that we'll be able to benefit from in 2025 as far as cadence goes.
Speaker Change: You already hit it that Q1, we've talked about that that's going to be a tougher comp for us.
Speaker Change: So I think we've had those conversations.
Speaker Change: Last call and we've been having those and then.
Speaker Change: Post post Q1, there is definitely more opportunity to have a higher growth rate.
Speaker Change: Now most of our story for this year and John said it in his prepared remarks, it's more of a back half of 2025 story.
Speaker Change: And so we want to have some opportunity to get these new products.
Speaker Change: Into more of our customer surgeon's hands and then we feel like there is an opportunity to to increase our growth in the back half of this year, but for now.
Speaker Change: We're not necessarily looking at it as a linear step up each each quarter, but as we get further into the year, we'll definitely give more updates on how these new products are being received by our customers. We're hearing great feedback already but as we have a little bit more time will be able to give a little bit more detail, but I think so.
Speaker Change: I think what you said is Q1 is a tough comp and then we will definitely be able to grow at higher rates in Q2, three and four.
Speaker Change: Okay.
Speaker Change: And then when.
Speaker Change: When I think about the product pipeline.
John: For you John.
John: You talked about it.
John: <unk> in the second half of the year from a growth perspective, but under line those.
John: That does that comment those comments when we think about our model. We think about asps as we think about unit volumes that we think about potentially the risk to lap a plastic cannibalization and so I.
Speaker Change: I guess, what I'm looking for is maybe from a broad stroke perspective, how you think about those products impact in some of those underlying metrics.
Speaker Change: And is there a downward pressure on Asps is it offset by higher volume your ability to train more surgeons, because you have potentially more product out there just help us kind of stinks through some of those moving parts I think that'd be very helpful. Thank you for taking the questions guys.
Speaker Change: Sure sure. Thanks, Brian good to talk to you.
Speaker Change: Yes.
Speaker Change: As we.
Speaker Change: Get out there with these products and there are several.
Speaker Change: We are training surgeons comprehensively on these in these new trading initiatives, we have called Bunion Masters events, where surgeons are coming in we had won a couple of weeks ago in Nashville for instance over 100 surgeons came to to get trained one of the best attended meetings I've seen in several years.
Speaker Change: The attractiveness of multiple technology is being serviced through our dedicated sales channel now being able to address their or minimally invasive osteotomy needs their midfoot correction needs, they're more severe bunion needs with lap of Plasty and then of course with Dr. <unk> for I'm, sorry, I said, Dr biopsy, but.
Speaker Change: Arthritic MTP joints as well we've got this comprehensive portfolio that I think is going to work and great harmony together to further penetrate.
This big opportunity ahead of us.
Speaker Change: From a pricing standpoint in the mix.
Speaker Change: I don't necessarily think theres going to be a big shift happening in blended ASP.
Speaker Change: I see more of this being more of a procedure volume play over the course of the year and we are.
Speaker Change: Got a little dusting of impact from these products right at the end of Q4, we will get a little in Q1, but again its a big comp as we get into Q2, we'll get a little more impact three more impact in and be in a great situation as we lineup for Q4 binding season. So.
Speaker Change: Hope that gives you a perspective, but.
Speaker Change: There are natural kind of guard rails around cannibalization between our MSR theonomy approaches and lots of plastic.
Speaker Change: <unk> being most surgeons mind relegated to the more severe and moderate to severe and more concentrated there were these mis osteotomy theyre going to be targeting that more mild to moderate and of the spectrum where were the least penetrated with <unk>. So.
Speaker Change: Again, I think I think everything is set up really nicely I think we're really excited.
Speaker Change: To see the full impact that this comprehensive bundled solution portfolio can break.
Speaker Change: Sales force is very excited and morale is very high we've got a sales meeting this weekend in Orlando and it's going to be a lot of fun. So.
Speaker Change: Maybe a little more than you were looking for but I'll give you a little story.
Speaker Change: Alright appreciate it and looking forward to it thank you.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Lilly Lozada: Our next question comes from Lilly Lozada from J P. Morgan. Please go ahead.
Speaker Change: Great. Thanks, so much for taking the question maybe.
Speaker Change: Maybe just a shift.
Speaker Change: ZIP to profitability, that's obviously come into greater focus so could you talk through how you're thinking about the different components down the P&L, what's driving the leverage this year and then.
Speaker Change: Part two how you're thinking about balancing that leverage with reinvigorate growth, especially with all these new products that you have coming to market that will have to invest behind.
Speaker Change: Yes, Great question, Wally and let me let me, let me begin and maybe John can can follow up with it.
Speaker Change: We've talked a little bit about when we went public some of our initiatives and our focus areas one of them was to grow a very large.
Speaker Change: Direct sales channel and direct sales team and so we've made a lot of progress in that area and so a lot of the leverage that we're seeing as we are no longer aggressively building that team. The way we had in prior years and so is there some very natural leverage that comes from a more expensive.
Speaker Change: <unk> sales force.
Speaker Change: Have a much higher percentage of our sales force. That's I'm Sure Commission for example, and we're just not building as aggressively as we used to so we're going to see a lot of.
Speaker Change: Improve it.
Speaker Change: Leverage that Youll see on the sales and marketing line, but thats going to be very natural and won't really.
Speaker Change: Impact our ability to grow that's the benefit of where we are at this point in time. We've spent a lot of time building the sales channel and we've built a very large customer base.
Speaker Change: Base over 1100 customers and so now.
Speaker Change: It doesn't have.
Speaker Change: A lot of direct incremental costs to just now provide our sales force and our surgeon customers just more product and so.
Speaker Change: It's a very natural progression and so that's why we we know that we'll see.
Speaker Change: And believe that we'll see this improved leverage throughout the year. So that's why we improved our adjusted EBITDA of 50% in 2024 as compared to 2023, and so we're getting the remaining 50%.
Speaker Change: This year in 2025.
Speaker Change: Great. Thanks.
Speaker Change: Maybe just a follow up I know, it's still early in the launch of some of these new products.
Speaker Change: So can you talk about some of the early feedback and competitive dynamics that you've seen since you've launched and have you seen some of the docs that you may have lost to competitive Trialing last year come back to either lock with last year. Some of these newer SaaS osteotomy products. Thanks, so much.
John: Sure sure this is John.
John: The early feedback we're hearing on these products is very positive. These had been worked on for several years, they're very refined as they are now entering early surgeon users hands and we're seeing those post operative X rays were seeing the bone healing.
John: And getting some numbers under under our belts now so we're really confident that this is going to reinforce our position with our customer base and help us bring on new customers now that we have that more diversified and broad portfolio as.
John: As far as competition, we really havent seen any real changes from earlier discussions.
John: We saw the competitive noise that occurred during mid 2024 kind of abate or level out in the fourth quarter.
John: We saw in the fourth quarter, a lot of strength in a lot of surgeons that.
John: Dabbled with other competitive products during the summer months coming back to lap a philosophy in the busy fourth quarter.
John: That's.
John: Hopefully that addressed your question.
John: Yes, that's perfect. Thank you.
John: Sure.
John: Thank you one moment for our next question.
John: Our next question comes from column <unk> from.
Speaker Change: From Morgan Stanley. Please go ahead.
Thanks, guys for taking the question just one quick one for me and it's something we've been off quite a bit from client support it was pulled off addressing on the coal, but keen to hear any any of your thoughts on the Zimmer Paragon deal I guess shorter term on potentially benefiting from some disruption and then how you expect this to change competitive dynamics on a longer term.
Speaker Change: If that's all thank you.
John: Hi, Kevin It's John Thanks for the question.
Speaker Change: I really.
Speaker Change: We probably don't have a lot to comment on there at this point.
Speaker Change: We've got our heads down growing our product line running our business and we'll just have to see how the.
Speaker Change: The acquisition plays out and the effects on the market.
Speaker Change: Those two companies formally join up.
Speaker Change: Sure. Thanks.
Speaker Change: Sure. Thank you.
Speaker Change: While mobile front next question.
Speaker Change: Our next question comes from Richard <unk>.
Speaker Change: From tourists Securities. Please go ahead.
Speaker Change: Alright, thanks for taking the questions.
Maybe just.
Speaker Change: To start off with.
Speaker Change: Just going back to one.
Speaker Change: One of the value propositions that I remember.
Speaker Change: Initially was around lab, a flat fee or lap it is huge and versus osteotomy.
Speaker Change: Recurrence rates are lower and people were not getting the right procedure for the condition.
Speaker Change: Okay, I guess with your osteotomy solution product I appreciate that it's probably easier and more elegant.
Speaker Change: For surgeons.
Speaker Change: But do you think that the clinical outcomes over time, we're going to show that you're going to have better.
Speaker Change: Current rates.
Speaker Change: Versus traditional osteotomy products I'm, just trying to think about the actual clinical benefit to physicians and patients over time here versus capitalizing on what physicians are going towards I appreciate that but is the clinical utility from your product differentiation going to bear out versus.
Speaker Change: Traditional products and the osteotomy segment. Thanks.
Speaker Change: Hi, Rich John Yes, Great question, and one we've been answering a fair amount.
Speaker Change: <unk>.
Speaker Change: The important thing about the way we are approaching our procedures is we're fixing the third plane the rotational playing along with.
Speaker Change: The other two planes of the correction and Thats not something thats been focused on and osteotomy is.
Speaker Change: Traditionally too.
Speaker Change: Later degree, particularly in the minimally invasive osteotomy segment, so our core philosophy, and what we pioneered and developed in the market and built into lap of <unk> was a three.
Speaker Change: Three playing correction. So we're taking the minimally invasive <unk> approach in making a three point approach, we believe fixing that rotational plane mixed the correction more enduring over the long term and there is good scientific papers in the clinical literature that indicate that as well so.
Speaker Change: If not for that if not for developing a three plane. While we believe can be a more enduring correction, we may not be in that game, but.
Speaker Change: We believe we're the best equipped to do it and we've done it through some really really well developed instrumentation and now we've got great ability of.
Speaker Change: World renowned minimally invasive foot surgeons, helping train surgeons as we roll these products out so.
Speaker Change: Yes.
Speaker Change: The way we're approaching it.
Speaker Change: Got it thanks, and then just as a follow up it looks like the consensus is about.
Speaker Change: About just under $53 million for the first quarter of 2005.
Speaker Change: Hey.
Speaker Change: Does that seem like a reasonable place.
Speaker Change: 5% year over year growth rate, which is down from your fourth quarters on a tougher comp.
Speaker Change: Wanted to get your view on that and then.
Speaker Change: Just how the year plays out should we be thinking of <unk>.
Speaker Change: Like a 33, 34% weighting of the year.
Speaker Change: As a percentage of the total.
Mark: Yes, rich this is mark thanks for the question. So what we've been talking about Q1 is weak.
Mark: We've said, hey, it's probably going to be low single digit growth rates.
Mark: Year over year compared to Q1 of 2024, we had a really strong quarter last year in Q1, and so we've been saying, it's probably low single digits.
Mark: And then we have the ability to expand and grow from there so.
Mark: <unk>.
Mark: It's going to be a tougher comp and then we feel like there's a real opportunity to be in the double digits for most if not all of the remaining quarters in the year. It's just we've got to get over this tough comp first.
Mark: With respect to Q4.
Mark: I think we're going to have somewhat similar growth rates in the fourth quarter and so it will it will be somewhere in that range that you talked about as far as its contribution for the full year it might be a little bit stronger than what you said, but I think we'll give a little bit more color as each quarter progresses here and as these new products.
Mark: We're getting the surgeons, we see the adoption rates there.
Mark: But I think that's why we said at Q1 is the tough quarter and then we.
Mark: We really see some improvement in every quarter after that.
Mark: Thank you.
Mark: Thank you.
Mark: For our next question.
Speaker Change: As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.
Speaker Change: Our next question comes from Danielle <unk> from UBS. Please go ahead.
Danielle: Hey, good afternoon, guys. Thanks, so much for taking the question congrats to a nice.
Speaker Change: For the year.
Speaker Change: John I was hoping you could comment a little bit on you alluded to potentially the osteotomy broader product offering.
Speaker Change: New surgeons to pick up here.
Speaker Change: Ear devices as a whole.
Speaker Change: And I wanted to see if there is a way to sort of frame that for us like how many surgeons you see us.
Opportunistic there and how quickly something like that could could transpire and then I have one follow up.
Danielle: Sure Hi, Danielle Thanks for the question.
Speaker Change: We talked about.
Speaker Change: Adding roughly 200, new surgeons during the year to add to our base of surgeon users we think thats.
Speaker Change: Reasonable target for this year.
Speaker Change: I think when we think about framing.
Speaker Change: The size of the market that were really targeting with these new technologies.
Speaker Change: We're going after the 70% portion of the 450000 procedures. So.
Speaker Change: We think we have about <unk>.
Speaker Change: Nearly a quarter of the lap of this market segment today on a procedure penetration basis.
So we're we're very concentrated in the more moderate to severe end of that of the total bunion market.
Speaker Change: And we have pretty good market share there like I said approaching 25%.
Speaker Change: So if <unk> is around 30% of the overall market.
Speaker Change: We're going to continue to drive penetration into that segment with lack of Plasty and Dr. Plasty and we're going to keep iterating and innovating those like we always have.
Speaker Change: But now we've got this additional opportunity to drive these new targeted technologies into the larger 70% of available procedures, which is a really big opportunity for us and if we can get to 25% share of that larger volume segment of the market like we did with lap a philosophy in the lap at a segment that could.
Speaker Change: Amount to another $350 million of potential revenue.
Speaker Change: We're focused on building on over the next several years so.
Speaker Change: We believe this comprehensive portfolio.
Speaker Change: Early targeting these four segments of the bunyan.
Speaker Change: Bunion classes is going to give us a lot more shots on goal and ramping our penetration in the overall market.
Speaker Change: Got you. Okay. That's helpful. And then my follow up question is.
Speaker Change: Higher level I guess looking at the total foot and ankle and I know you guys have a lot of runway in bunions alone, but and mix for example, but.
Speaker Change: Yes.
Speaker Change: And I don't want you to.
Speaker Change: Give anything related to the competition or anything like that but.
Speaker Change: Maybe talk about how you guys look at the opportunities throughout the rest of the foot and ankle.
Speaker Change: What you think is reasonable over the next five years to attack there based on what you guys have in house today from a technology perspective, thanks, so much.
Speaker Change: Yes, great great what I'll try to.
Speaker Change: Deliver on that as best I can.
Speaker Change: We've got a very active R&D program and we've been working on products for the last three years, we've got a robust pipeline of more product rollouts coming throughout this year beyond what we've advertised.
And we have programs leading into 2006 and 2027.
Speaker Change: We're going to continue to fuel the growth of the business. So.
Speaker Change: I think if you look at where we will look to innovate and what Youll see youll see types of products that speed penetration into our core bunion and mid foot markets Youll.
Speaker Change: Youll see us targeting new incremental procedures that anchor back to that core procedure base.
Speaker Change: And then we're also introducing new complementary technology or product platforms that allow our reps to more fully service. The case with a more comprehensive line of products. So that they can become more of a one stop shop for all of the surgeons needs in there and they are bunion and bunion midfoot related cases.
Speaker Change: That's how we look at it for at least the near to moderate term.
Speaker Change: Longer term, obviously, we have opportunities and we can we can explore other areas in the foot and ankle if needed, but we see such a tremendous opportunity just capitalizing on what I described there for the next several years that theres really not a ton of need to.
Speaker Change: Really go elsewhere.
Speaker Change: That's helpful. Thanks, so much guys.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: And we'll move from these questions.
Speaker Change: Our next question comes from Ben Hayner from Lake Street Capital markets. Please go ahead.
Ben Hayner: Good afternoon, gentlemen, thanks for taking the questions.
Ben Hayner: First off for me can you give us a sense of the utilization that you see from the surgeons that.
Ben Hayner: Adopted your osteotomy operating thus far.
Ben Hayner: It's early days and all but.
Ben Hayner: Can you maybe characterize characterize what those folks look like are they are the ones that are doing 50% of their cases with lack of class ones that maybe are newer and have only dabbled in lab lastly, what are those close look like.
Ben Hayner: And.
Ben Hayner: What was their utilization of the <unk> out of the offerings look like.
Ben Hayner: Yes pleased to meet you online here this is John.
Ben Hayner: As we rolled out our new our new osteotomy systems, we develop them in conjunction with a modest group of surgeons that really specialize in minimally invasive osteotomy and minimally invasive osteotomy surgery. So they tend to be very high utilizes of of that technology.
Ben Hayner: Some of them actually do use <unk> to some degree in their practice some more than others.
Ben Hayner: As we've.
Ben Hayner: Segmented our customer base.
Ben Hayner: Earlier doctors that we've been giving access to our minimally invasive osteotomy products have been those that.
Ben Hayner: Or on the lower end of utilization of lack of Plasty. So that we can fill a bigger void in that customer's practice.
Ben Hayner: Over time, we'll continue to expand in.
Ben Hayner: And we believe will have a more balanced business a blend of lap of plastic for the more moderate to severe range.
Ben Hayner: User basis, Bunions, and our MSS Theonomy solutions and even our.
Ben Hayner: Speed MTP for those that have great toe arthritis for the others.
Ben Hayner: Hey, Ben.
John I: John said I, just wanted to add a little bit to that is there's different.
John I: Different surgeons have different criteria for how they treat bunions and so the way we've segmented the market places. We were initially trying to go after those surgeons that do more of these minimally invasive osteotomy approaches.
John I: But theirs and John alluded to it earlier, there's kind of a natural guardrails too because a lot of these surgeons have predetermined.
John I: Severity distinctions as far as when certain technologies are used or certain approaches.
John I: Our being used but as initially to answer your question. Specifically initially we're going after those surgeons, who are primarily focused on Austria automate and so we hope to get a really large share of their current business.
John I: Okay. Thanks for the color there that makes a lot of sense.
Speaker Change: Second question.
John I: Yes.
John I: The new kind of four classes of Bunions the sub segments.
John I: Messaging.
Or your direct to patient marketing activities that changed that at all is there any adjustments that need to be made there.
John I: Yeah, that's a great that's a great question.
John I: We have opportunities.
John I: Definitely know that we did not have before we've been pretty concentrated on driving the lap of flash the message.
John I: Making patients so we're helping them get educated and connect with doctors on that front, but as these technologies gained more traction.
John I: And we see the uptake we definitely have the opportunity to take some different approaches there.
John I: Okay. So stay tuned and then if I could.
John I: And one more just any update on the attach rates for <unk> and Sibley is I think last time, you talked about is over 40%.
John I: There.
Speaker Change: Yes, sure speed play continues to become more popular it is now.
Speaker Change: North of 50% of our overall fixation mix.
Speaker Change: And will it continue to grow.
Speaker Change: And it would become a much larger share.
Speaker Change: It has the opportunity to do so we are working on new configurations of speed plate for next generation implant designs and serving.
Speaker Change: Other opportunistic indications.
Speaker Change: We think it is setting a new standard in bone fusion fixation out there in the marketplace.
Speaker Change: It's a really exciting technology for us so.
Speaker Change: Excellent well, that's all I have thanks, so much for taking the questions.
Speaker Change: Yes.
Ben Hayner: Thanks, Ben Thank you you bet.
Speaker Change: Thank you.
Speaker Change: Im showing no further questions at this time I will now turn it back over to Vivian for closing remarks.
Speaker Change: Thank you operator on behalf of Chief medical. Thank you everybody for joining US today. This concludes our call and we look forward to our next update following the close of the first quarter 2025.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
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