Mathew Blackman

Mathew Blackman from TD Cowen asked for clarification on the company's comment about 'exploring all options to increase shareholder value' and sought guidance on the top-line revenue cadence for 2026.

Answer

President and CEO David Bailey clarified that the comment refers to expanding the company's commercial footprint and leveraging its channel into other pediatric subspecialties to grow the total addressable market. COO and CFO Fred Hite confirmed that 2025's quarterly revenue, EBITDA, and free cash flow seasonality would be a good proxy for 2026, with Q1 being the softest and Q3 the strongest.

Mathew Blackman inquired about David Bailey's comment regarding 'exploring all options to increase shareholder value,' seeking further expansion on what that entails. He also asked for clarification on the top-line revenue cadence for 2026, specifically if 2025's quarterly flow would serve as a good proxy.

Answer

David Bailey (President and CEO) clarified that 'exploring all options' refers to leveraging OrthoPediatrics' powerful commercial footprint in children's hospitals to expand into other, often less capital-intensive, pediatric subspecialties, thereby growing the total addressable market. Fred Hite (COO and CFO) confirmed that 2025 is a good proxy for quarterly revenue, EBITDA, and free cash flow patterns, with Q1 typically being the softest and Q3 the strongest, and free cash flow being negative in the first half due to set deployment before turning positive in the second half.

Mathew Blackman of TD Cowen asked about the long-term growth trajectory for the Nevro business beyond 2026, specifically when it might recalibrate to corporate-level growth and if portfolio enhancements (organic or inorganic) are needed. He also sought an update on the international business, including current headwinds, the path to double-digit growth, and specific geographies requiring extra attention.

Answer

Keith Pfeil, President and CEO, stated that Nevro provides a pain point in the portfolio, expecting some lumpiness in 2026 as the go-to-market approach is recast. He emphasized driving consistency, product development, exploring other neuromodulation options (like peripheral nerve), cross-selling with legacy Globus products, developing new SCS products, and competitive recruiting. For international, Pfeil noted historical 12%-15% long-term growth potential. He acknowledged challenges in the last 12 months but highlighted EMEA's integral role in 2025 growth, while APAC (Japan) and LATAM faced choppiness. He believes the international business is well-poised for 2026, with growth improving later in the year.

Mathew Blackman inquired about the long-term recalibration of the Nevro business to corporate growth levels, including the need for portfolio enhancements, and sought an update on the international business, its headwinds, and the path to double-digit growth across specific geographies.

Answer

Keith Pfeil, President and CEO, stated Nevro will see short-term lumpiness but long-term growth from consistency, product development (SCS, peripheral nerve, mechanical solutions), cross-selling, and competitive recruiting. For international, he reiterated a 12%-15% long-term growth goal by going deeper in existing countries, noting EMEA drove 2025 growth while APAC (Japan) and LATAM faced challenges, with overall improvement expected in 2026.

Mathew Blackman of Stifel pressed for details on the reaffirmed top-line guidance following a significant Q1 miss, asking if the company expects to recover lost sales or if underlying assumptions for Nevro or NuVasive had changed.

Answer

COO and CFO Keith Pfeil clarified that there was no material change to the guide, as headwinds from biologics and neuromonitoring were already contemplated. He expressed confidence in 'clawing back' the delayed enabling technology sales and seeing a spine business uptick now that supply chain issues are resolved. CEO Dan Scavilla declined to provide specific Q2 guidance.

Mathew Blackman of Stifel questioned the bridge from the Q4 2024 EPS to the full-year 2025 guidance, noting that annualizing the Q4 result nearly reaches the bottom end of the standalone guidance range, and asked if there were any one-time items.

Answer

CFO Keith Pfeil acknowledged some minor drags in Q4, including higher inventory write-offs and bad debt expense, but characterized them as small. CEO Dan Scavilla expressed confidence in the 2025 guidance, highlighting the planned synergy capture and overall execution strategy as key drivers for the upcoming year, implying the annualized Q4 run-rate is not the sole basis for the forecast.

Mathew Blackman of Stifel asked for the most important puts and takes for the top and bottom line in 2025, noting that current consensus estimates might seem low given the strong Q3 performance.

Answer

COO & CFO Keith Pfeil outlined that 2025 top-line growth would be driven by increased cross-selling in the U.S. and internationally, while bottom-line improvements would come from annualized synergies and a focus on managing spending. He noted that significant margin benefits from manufacturing in-sourcing are expected more in the back half of 2025 and into 2026.

Mathew Blackman asked for clarification on the CMS impact on the Bone Growth Therapies (BGT) segment and sought further details on the long-range plan (LRP) extension, specifically what caused the delay and what critical execution is needed for margin and cash generation improvement.

Answer

Julie Andrews (CFO) clarified that the CMS change would have an immaterial annual impact but a 1% headwind on BGT revenue in Q1. Massimo Calafiore (President and CEO) explained the LRP extension reflects the deliberate and aggressive distributor transition, which now sees 75% of U.S. net sales from top 30 distributors, creating a stronger foundation for upcoming innovations like VIRATA. Julie Andrews added that achieving mid-teens EBITDA and positive free cash flow by 2028 relies on 300 basis points of gross margin expansion through productivity, fixed cost leverage, back-office efficiency, and working capital management.

Mathew Blackman asked about the specific impact of the CMS pilot program on the Bone Growth Therapies (BGT) franchise in Q1 and sought clarification on the reasons for extending the long-range plan (LRP) timeline, specifically inquiring about critical execution points for margin and cash generation improvement.

Answer

CFO Julie Andrews clarified that the CMS change would result in an immaterial annual impact but a 1% headwind to BGT revenue in Q1. President and CEO Massimo Calafiore explained that the LRP extension reflects the deliberate care taken in the spine commercial channel optimization, which has strengthened the foundation and distributor network, now driving 75% of US net sales from top 30 partners, enabling future innovation like VIRATA. Julie Andrews added that achieving mid-teens EBITDA and positive free cash flow by 2028 relies on gross margin expansion to 74% (72.5% in 2026) through productivity improvements, fixed cost leverage, moderating SG&A, automation, and working capital management.

Mathew Blackman of Stifel sought to quantify the impact of the fewer selling days in Q1 and asked for a detailed breakdown of the $10 million full-year revenue guidance reduction, questioning how much of the impact was already felt in the first quarter.

Answer

CFO Julie Andrews confirmed the one less selling day was a headwind of just over 1.5% to Q1 growth and that remaining quarters have the same number of days as the prior year. She detailed the guidance reduction as $5 million from U.S.-funded NGO business and the remainder from spine and biologics channel disruption. She noted that while some of this impact (pricing and softness) was felt in Q1, the majority is expected in Q2.

Mathew Blackman sought clarification on the total revenue headwinds (M6 exit, FX, ortho product sunsetting) included in the 2025 guidance and asked how the company maintained a strong EBITDA outlook despite these headwinds. He also requested more detail on 7D adoption trends and the resulting portfolio pull-through.

Answer

CFO Julie Andrews confirmed the guidance includes a $23.4M headwind from the M6 exit and a $4M FX impact, noting the strong EBITDA outlook is due to underlying margin expansion and the lower profitability of the discontinued M6 business. CEO Massimo Calafiore elaborated that 7D adoption is primarily with new accounts through earn-out agreements that are outperforming targets. He emphasized this success directly translates to higher utilization of Orthofix implants, drives customer conversion, and supports a sustainable growth rate for the spinal implant business.

Mathew Blackman of Stifel inquired about the primary risks to achieving the 2027 financial targets, whether the mid-teens EBITDA goal is a final objective or a milestone, and the expected magnitude of future free cash flow generation.

Answer

CFO Julie Andrews expressed confidence in the targets, identifying overall market growth as the main external variable. She clarified that the mid-teens EBITDA target for 2027 is a "milestone, not a goalpost," acknowledging the company's structure has changed since it previously reached 20%. Regarding cash flow, Andrews stated the company is focused on cash conversion but wants to maintain optionality for strategic investments, such as insourcing manufacturing, before providing a specific metric.

Mathew Blackman asked for clarification on the 2026 Adjusted EBITDA guidance, specifically if it was projected to be north of $20 million. He also inquired about the potential 'halo effect' of the ASC-centric INTRA Ti product, and if it would drive broader portfolio adoption in that setting.

Answer

CFO Anshul Maheshwari clarified that the Adjusted EBITDA for 2026 is expected to be an increase from the prior year but 'a bit lighter' than $20 million, attributing the operating leverage to new product commercialization, commercial infrastructure expansion, and R&D investments. CEO Laura Francis stated that while SI-BONE already has a significant ASC footprint (around 35% of SI joint fusion sales), INTRA Ti is specifically designed to grow the business in ASCs due to its fit with interventional spine physician workflow, 3D-printed titanium solution, and streamlined single-use instrument kit, expanding the market in states where allograft solutions are not reimbursed.

Mathew Blackman asked for clarification on the adjusted EBITDA guidance for 2026, specifically if his calculation of north of $20 million was accurate. He also inquired about the potential 'halo effect' of the ASC-centric INTRA Ti product on the broader portfolio in that setting.

Answer

CFO and COO Anshul Maheshwari clarified that the adjusted EBITDA would be an increase from the prior year but 'a bit lighter' than $20 million, attributing the 1.2x operating leverage to new product commercialization, commercial infrastructure expansion, and R&D investments. CEO Laura Francis confirmed INTRA Ti is targeted for ASCs, aligning with interventional spine physician workflow and spine surgeons. She noted its 3D-printed titanium solution expands the market by serving states without allograft reimbursement and interventionalists preferring a non-allograft posterior approach, contributing to SI joint fusion growth.

Mathew Blackman asked for context regarding the expectation that approximately 20% of pumps in 2026 will go through the pharmacy channel, specifically inquiring about the current coverage and contracting status and where the company expects to be by the end of the year.

Answer

EVP and CFO Leigh Vosseller explained that Tandem has contracts with major PBMs covering about 80% of covered lives, but formulary access is currently around one-third. She noted that pay-as-you-go contracts become effective late in Q1, leading to low initial volume that will scale up to an average of 20% of pump shipments through pharmacy for the year. Additionally, the company aims to shift more existing DME customers to pharmacy, starting from less than 5% in Q4 2025 to an average of roughly 10% for 2026.

Mathew Blackman inquired about the expectation of approximately 20% of pumps going through the pharmacy channel in 2026, seeking context on current coverage and contracting status, and where Tandem expects to be by the end of the year.

Answer

EVP and CFO Leigh Vosseller stated that Tandem has contracts with all major PBMs, covering about 80% of lives, but currently has formulary access for roughly one-third of lives. She explained that PayGo contracts become effective late in Q1, leading to low initial volume that will scale up to an average of 20% of pump shipments by year-end. Additionally, she noted that less than 5% of the installed base ordered supplies through pharmacy in Q4 2025, with an expectation to scale to about 10% on average for 2026.

Mathew Blackman inquired about the specific contribution of price increases to U.S. revenue and whether the current level of pricing benefit is sustainable.

Answer

CFO Leigh Vosseller confirmed the pricing impact was in the correct ballpark and established this as a 'new bar' for future expectations. She noted that while the DME channel was the primary driver, the pharmacy channel also provided a meaningful price benefit despite low volumes, signaling future opportunity.

Mathew Blackman of Stifel asked for quantification of Q4 shipping delays, the reason for softer December sales trends, and clarification on whether the 2025 guidance includes contributions from the new Type 2 indication or Libre integration.

Answer

Leigh Vosseller, Executive Vice President and Chief Financial Officer, explained that the primary factor in Q4 was a muted seasonal curve in the final weeks of December, rather than shipping delays, which were a smaller contributor. She confirmed these factors were considered in the 2025 guidance and that underlying business trends like MDI conversions and renewals remain strong.

Mathew Blackman inquired about the specifics of new patient starts in Q3 versus Q2, particularly the growth cadence for the new Tandem Mobi pump.

Answer

EVP and CFO Leigh Vosseller celebrated a return to year-over-year new start growth, marking the second consecutive quarter of increased MDI conversions. She noted that new pumpers constituted over half of shipments, with MDI users making up more than half of that group, a trend consistent with Q2. The sequential pump shipment increase from Q2 to Q3 was modest due to typical seasonality.

Mathew Blackman asked about the near-term impact of the Salesforce optimization initiatives, the rationale for undertaking this transformation now, the anticipated effort involved, and the potential long-term benefits and timeline for visible returns across franchises.

Answer

Ivan Tornos, Chairman, President, and CEO of Zimmer Biomet, explained the transition from non-dedicated to 100% dedicated and specialized U.S. sales reps, including augmentation in high-growth areas like robotics, S.E.T., and ASCs. He cited the absence of portfolio gaps, new product momentum, a significant productivity gap, and low penetration in ASC/S.E.T. as reasons for the timing. Tornos detailed a prudent, staged approach with third-party help, noting one-third of the transformation is complete and going better than expected. He expects the entire transformation to be finalized by the end of 2027, marking the final step in Zimmer Biomet's overall transformation.

Mathew Blackman inquired about the rationale and execution of Zimmer Biomet's U.S. sales force optimization, asking why the initiative is happening now, the scope of the undertaking, and when visible returns are expected across franchises, specifically whether benefits will be seen by the end of 2027.

Answer

Ivan Tornos, Chairman, President, and CEO, explained the transition from non-dedicated to 100% dedicated and specialized U.S. sales force, addressing productivity gaps and leveraging new products. He noted the timing is opportune due to a strong product portfolio. The transformation is a staged approach, with one-third completed, and full execution expected by the end of 2027, when productivity increases are anticipated.

Mathew Blackman asked about the strategic use of the new capital from Oberland Capital, inquiring if it would accelerate growth initiatives for 2025 or 2026 and how the funding impacts the company's runway to sustained breakeven. He also followed up on the neuro franchise's strong Q1 performance, asking how its trajectory is tracking against internal expectations.

Answer

Executive Joseph Burnett confirmed the new capital enables accelerated hiring for field support and preclinical resources in anticipation of commercialization from pharma partners. He stated the funding can get ClearPoint to cash flow breakeven, providing significant flexibility until drug launches generate meaningful cash flow. Regarding the neuro franchise, Mr. Burnett noted that while the 70% growth was on a lower prior-year comparison, performance is on plan, with expectations for growth significantly above 20% for the full year, with potential upside from new product adoption.

Mathew Blackman asked about the strategic use of the new incremental capital from Oberland Capital, its potential to accelerate growth initiatives, and the updated runway to achieving sustained breakeven. He also followed up on the neuro franchise's strong Q1 performance and whether its growth trajectory is tracking ahead of internal expectations.

Answer

Executive Joseph Burnett explained that the new capital allows ClearPoint Neuro to accelerate hiring for field support and preclinical resources to meet anticipated demand from pharma partners. While not increasing guidance yet, he confirmed the funding provides a clear path to cash breakeven. Regarding the neuro franchise's 70% growth, Burnett stated it was on plan, aided by a favorable comparison, and that the company expects over 20% growth for the full year with potential upside from new product adoption.

An analyst on for Mathew Blackman inquired about the key assumptions behind the wide range of the 2025 revenue guidance (15% to 31% growth).

Answer

Executive Joseph Burnett detailed the components of the guidance. He expects the core device business to grow faster than its 21% rate in 2024 and pharma product sales to also grow strongly. Capital equipment sales are expected to be closer to flat after a very strong 2024. Burnett clarified that the primary variable creating the wide range is the timing of the preclinical services facility expansion and its GLP capabilities, which could come online anytime between June and December 2025.

Mathew Blackman asked for the source of confidence in the new 22-25% pharmacy mix guidance, the company's control over the reimbursement channel, and details on the sales force expansion, including ramp-up timing for new territories.

Answer

CFO Stephen Feider explained they have strong visibility into the pharmacy mix from ongoing discussions with PBMs and health plans. He clarified that Beta Bionics directly controls the reimbursement channel by checking every prescription for pharmacy coverage first. Feider also confirmed the 20 new sales reps are trained and will contribute starting in Q2, though he did not specify a full productivity timeline.

Mathew Blackman asked for a qualitative sense of where Beta Bionics is seeing commercial success and if there are common threads among patients or prescribers. He also questioned if his calculation of ~100 basis points of market share gain implied by the 2025 guidance was accurate.

Answer

CEO Sean Saint explained that commercial success is broad, with the user base mirroring the general Type 1 diabetes population rather than a specific niche, aligning with their goal of impacting population health. CFO Stephen Feider declined to comment on or confirm the analyst's specific market share gain calculations.

Mathew Blackman from Stifel noted the strong quarter in Diabetes and asked for the specific sources of strength, including pump growth and any uptick in basal CGM adoption. He also inquired about expectations for the supply environment, referencing recent comments from Dexcom.

Answer

Executive Jason Clemens confirmed that pump growth contributed a couple of million dollars but noted no significant change in the trend for basal CGM adoption. Executive Suzanne Foster added that the improvement stems from 'good old-fashioned leadership and execution,' with a strong team, better processes, appropriate technology deployment, and a more focused and leveraged commercial team.

Mathew Blackman of Stifel Financial Corp. sought clarification on the 2025 guidance, asking if the asset disposal drag was limited to deals already closed and questioning the growth assumptions for the Diabetes segment, including pumps and CGM.

Answer

CFO Jason Clemens confirmed the 40 basis point guidance drag is solely from the completed Q4 asset sale. Regarding the Diabetes segment, Clemens stated that pump revenue is now stable with expectations for modest growth, but the company is not yet committing to growth in the larger CGM business until performance is proven, despite encouraging signs.

Mathew Blackman of Stifel inquired about the long-term growth outlook for the diabetes business, specifically if high-single-digit growth is still achievable, and asked for practical details on how AdaptHealth plans to acquire new CGM patients. He also asked about other organic growth drivers like national accounts.

Answer

CEO Suzanne Foster explained that acquiring new CGM patients requires improving operational timeliness and service levels to support the sales force, not just expanding it. CFO Jason Clemens confirmed that based on competitor performance and manufacturer reports, the end market is likely growing in the upper-single to lower-double digits, highlighting AdaptHealth's internal execution gap. Foster also detailed organic growth plans, including nationalizing health system partnerships and increasing covered lives through managed care contracts, supported by an expanded enterprise sales team.

Mathew Blackman asked for an update on sales force productivity, especially for recently hired reps, and sought details on EOS system placements and the resulting portfolio pull-through.

Answer

Executive Patrick Miles explained that new reps typically take 12-18 months to fully adopt and sell ATEC's proprietary procedures. Executive J. Koning supported this with a 23% same-store sales growth figure, demonstrating strong performance in established territories. Regarding EOS, Miles noted that most placements are with new customers and that while historically used in pediatrics, ATEC is successfully driving adoption in the adult deformity segment, describing the strategy as being in its 'first inning' with significant runway.

Mathew Blackman asked about any notable impact from hurricanes or IV solution shortages on Q4 guidance and sought more detail on the productivity ramp of new sales representatives.

Answer

Executive J. Koning stated there was no material impact from hurricanes or IV shortages, with any minor disruption expected to be recovered. Executive Patrick Miles explained that new sales reps are on a ramp that can take 12-24 months to fully reflect in business results due to non-competes and hospital access processes, but confirmed they have the inventory needed and that same-store sales continue to grow strongly.

Mathew Blackman of Stifel inquired about the inventory stocking strategy for the upcoming European launch of Eversense 365 and asked for observations from the Mercy Health partnership, particularly regarding the expansion of the prescriber base.

Answer

An executive, Tim Goodnow, explained that the inventory build for the European launch will be gradual and conservative. Regarding the Mercy partnership, Goodnow noted that while there is significant excitement, the company is in the early stages of expanding from endocrinologists to the much larger primary care physician population, which will require continued effort over the next few quarters.

Mathew Blackman of Stifel asked about the drivers of the recent INTERCEPT Fibrinogen Complex (IFC) momentum, questioning whether it stemmed from new customers or deeper penetration, and probed for an early outlook on IFC revenue for 2025.

Answer

COO Vivek Jayaraman explained that IFC growth is driven by both new customer acquisition and expanded use within existing accounts, with some hospitals moving to 100% adoption. While declining to provide 2025 guidance, Jayaraman noted that new BLA approvals and increased hospital capacity for new projects are creating meaningful tailwinds for future growth.

Mathew Blackman asked if the current high double-digit growth rate in U.S. stroke is sustainable until the launch of Thunderbolt. He also sought Penumbra's perspective on the recently announced Medtronic-Philips partnership aimed at increasing stroke awareness.

Answer

CEO Adam Elsesser expressed confidence in the stroke business, noting that interest in competitors' large-bore catheters is waning, which positions Penumbra's aspiration portfolio well for continued growth. He was "thrilled" by the Medtronic-Philips partnership, viewing any effort to raise stroke intervention awareness as beneficial for the entire field and all patients, without specific device-level competitive implications.

Mathew Blackman asked how Dexcom plans to defend its market position in the Type 1 pump-integrated segment, especially with increased competition expected next year.

Answer

CEO Kevin Sayer emphasized that all pivotal studies for their partners' AID systems were conducted with Dexcom sensors. He highlighted Dexcom's strong partner relationships, superior product accuracy, and long-standing market leadership in the Type 1 space as key defensive strengths they will leverage to maintain their position.