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Sanara MedTech Inc. (SMTI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net revenue grew 49% year-over-year to $26.305M, driven by soft tissue repair (+56% YoY to $23.538M); adjusted EBITDA improved to $0.9M, and gross margin expanded ~160 bps to 91.4% .
  • Versus consensus, revenue modestly beat ($26.305M vs $25.800M*) while EPS modestly missed (-$0.18 vs -$0.115*); BIASURGE benefited from an estimated ~$1.8M one-time demand due to Hurricane Helene-related IV/saline shortages, which should normalize in Q1’25 * .
  • Operating expenses rose 51% to $24.4M (SG&A +$6.1M, R&D +270% to $2.412M) including a $0.5M non-cash write-off of THP software; other expense increased to $1.3M on higher interest from the CRG term loan .
  • No formal guidance; management reiterated THP pilot launch in Q2 2025 (spend of $7.5–$10.0M in H1’25) and amended its loan to extend up to $24.5M of additional borrowings to 12/31/2025 .
  • Near-term catalysts: THP Q2’25 pilot, OsStic regulatory path (FDA breakthrough device; targeted U.S. launch Q1 2027), and continued distributor/facility expansion .

Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and mix: Q4 net revenue +49% YoY to $26.305M, led by soft tissue repair +56% YoY to $23.538M (CellerateRX Surgical and BIASURGE strength) .
  • Margin and profitability trends: Gross margin expanded to 91.4%; adjusted EBITDA improved to $0.9M; Sanara Surgical segment adjusted EBITDA rose to $4.1M (15.4% of segment revenue) .
  • Commercial coverage expansion: ~40 reps, >350 distributor partners (up from >250), products sold in over 1,300 facilities (up from >1,000), increasing VAC approvals and surgeon adoption .
    • Quote: “Our team delivered strong commercial execution… expanding our coverage and penetration… facilitating surgeon awareness and adoption…” .

What Went Wrong

  • Higher OpEx and interest burden: Operating expenses +51% to $24.4M; other expense $1.3M on CRG interest; net loss widened to $1.7M (-$0.18 per diluted share) .
  • THP investment drag: THP segment adjusted EBITDA loss widened to -$3.1M; segment net loss -$2.6M (vs +$0.5M prior-year quarter) amid platform build-out and $0.5M non-cash software write-off .
  • One-time tailwind to normalize: ~$1.8M of BIASURGE Q4 revenue tied to Hurricane Helene-related supply shortages; management expects normalization in Q1 2025 .

Financial Results

Consolidated P&L Metrics vs prior quarters

MetricQ2 2024Q3 2024Q4 2024
Net Revenue ($USD Millions)$20.159 $21.672 $26.305
Net Loss per Diluted Share (EPS)$(0.41) $(0.34) $(0.18)
Gross Profit ($USD Millions)$18.150 $19.680 $24.056
Gross Margin (%)90.0% (calc. from GP/Rev) 90.8% (calc.) 91.4%
Adjusted EBITDA ($USD Millions)$0.6 $0.8 $0.9

Note: Q2 and Q3 gross margins calculated from reported revenue and gross profit.

Segment/Product Revenue (Q4 2024 vs Q4 2023)

Revenue Stream ($USD)Q4 2023Q4 2024YoY $ ChangeYoY %
Soft tissue repair$15,079,871 $23,538,066 $8,458,195 56%
Bone fusion products$2,559,692 $2,767,299 $207,607 8%
Royalty revenue$50,250 $0 $(50,250) (100)%
Total Net Revenue$17,689,813 $26,305,365 $8,615,552 49%

Additional Q4 items

  • Operating Expenses: $24.431M; SG&A $22.417M; R&D $2.412M; Depreciation & Amortization $1.608M; $0.5M non-cash software write-off (THP) .
  • Other Expense: $1.326M, primarily CRG term loan interest .
  • Segments: Sanara Surgical net income $0.935M; THP net loss $2.635M .
  • Adjusted EBITDA: Consolidated $0.946M; Sanara Surgical segment adjusted EBITDA $4.053M (15.4% margin); THP segment adjusted EBITDA $(3.107)M .

KPIs and Commercial Coverage

KPIPrior PeriodCurrent (Q4 2024)Commentary
Field sales reps39 (YE 2023) 40 (YE 2024) Incremental coverage
Distributor partners>250 (YE 2023) >350 (YE 2024) Broader channel reach
Facilities selling products>1,000 (YE 2023) >1,300 (YE 2024) VAC approvals drove additions
BIASURGE one-time upliftN/A~$1.8M in Q4 Supply shortage tailwind to normalize

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
THP investment spendH1 2025Not specified$7.5–$10.0M New quantitative disclosure
THP pilot launch timingQ2 2025“Mid-2025 / first half of 2025” Q2 2025 confirmed Clarified timing
CRG term loan additional borrowings window2025Borrow by 6/30/2025 Borrow by 12/31/2025 Extended
OsStic U.S. launch timeline2027Not disclosed previouslyTarget Q1 2027 New timeline
Financial guidanceOngoingNo formal guidance No formal guidance Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
THP (clinical model, tech, commercialization)Building platform; pilot targeted H1’25; pursuing partners Pilot confirmed for Q2’25; H1’25 spend $7.5–$10.0M; recruiting BD/sales; seeking strategic/financial partners Execution progressing; spend intensifying
Distribution & coverage300+ distributors; 2,900+ potential sellers; >4,000 contracted/approved facilities (Q2/Q3) >350 distributors; sold in >1,300 facilities; 40 reps (YE 2024) Coverage expanding
BIASURGE demandSoft launch late 2023; ramp in 2024 (Q3) ~$1.8M Q4 uplift due to IV/saline shortages; normalization expected Q1’25 One-time spike; normalizing
Financing$55M CRG term loan; $15M drawn (Q2) Amended to allow borrowings through 12/31/2025; cash $15.9M; debt $30.5M; $24.5M availability Increased flexibility
ChemoMouthpiece$5M investment; exclusive U.S. distribution JV; CPT code; launch 2025 (Q3) Near-term health economics and clinical study; commercial pay contracts ramp Commercialization planning
IP & R&DOngoing filings and projects (Q3) 11 provisional patents in 2024; margin tailwind from soft tissue mix Building IP portfolio
OsStic (BMI)Not previously disclosedFDA breakthrough designation; U.S. launch target Q1’27 Pipeline addition

Management Commentary

  • Ron Nixon: “Our team delivered an impressive conclusion to 2024, with net revenue growth in the fourth quarter of 49% year-over-year, fueled primarily by sales of soft tissue products in our Sanara Surgical segment.”
  • Elizabeth Taylor: “Gross margin increased approximately 160 basis points to 91.4% of net revenue, driven by increased sales of our soft tissue repair products.”
  • Seth Yon: “We ultimately increased our distributor network to include selling agreements with over 350 distributor partners by year-end... our products were sold in over 1,300 facilities, up from more than 1,000 at the end of 2023.”
  • Tyler Palmer: “OsStic has been granted breakthrough device designation by the FDA… we expect OsStic to enhance and complement our current bone fusion portfolio… timeline assumes U.S. introduction in the first quarter of 2027.”

Q&A Highlights

  • THP pilot timing and commercial build: Management confirmed Q2’25 pilot; building BD and sales teams; value-based pricing tested for provider/payer markets .
  • THP funding strategy: Seeking third-party partners to offset burn and provide strategic advantages; discussions underway .
  • ChemoMouthpiece commercialization: Awaiting health economics and clinical study publications; progressing payer contract additions; JV distribution into oncology .
  • Profitability and cash: Company expects not to burn cash from operating activities near-term; Q3 showed positive operating cash flow .
  • Segment profitability trajectory: Focus on improving Surgical profitability while investing in THP; 2025 tracking to expectations .

Estimates Context

  • Q4 2024: Revenue beat ($26.305M vs $25.800M*), EPS missed (-$0.18 vs -$0.115*) *.
  • FY 2024: Revenue modestly above consensus ($86.672M actual vs $86.184M* estimate) *.
  • FY 2025: Revenue consensus $103.311M*; company provides no formal guidance *.

Values retrieved from S&P Global.

Q4 2024 Actuals vs Consensus

MetricConsensusActual
Revenue ($USD)$25,800,000*$26,305,365
Primary EPS ($USD)-$0.115*-$0.18

Key Takeaways for Investors

  • Q4 revenue strength and mix-led margin expansion are constructive; however, EPS missed and higher interest/OpEx remain headwinds—watch OpEx discipline and interest costs from CRG .
  • Soft tissue momentum (CellerateRX Surgical, BIASURGE) underpins Surgical profitability; expect BIASURGE to normalize post one-time ~$1.8M Q4 uplift—adjust revenue models accordingly .
  • Near-term spend on THP ($7.5–$10.0M in H1’25) is a planned investment; monitor partner participation to offset burn and validate payor/provider adoption .
  • Expanded distributor/facility footprint supports continued share gains; commercial execution remains a driver for top-line growth in 2025 .
  • Balance sheet flexibility improved via CRG amendment; optionality for growth investments without equity dilution remains a positive .
  • Pipeline catalysts: THP pilot (Q2’25) and OsStic (FDA breakthrough, target Q1’27) provide medium-term optionality; ChemoMouthpiece commercialization steps build oncology adjacency .
  • Trading lens: Expect near-term focus on THP milestones and Surgical margin trajectory; estimate revisions likely modest—raise revenue for Q4 beat, trim EPS on higher OpEx/interest, normalize BIASURGE run-rate into Q1’25 * .