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TELA Bio, Inc. (TELA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue reached $20.2M, up 26% year-over-year and 9% sequential; gross margin improved to 69.8% from 68.8% YoY, and EPS was $(0.22) vs $(0.51) in Q2 2024 .
  • Versus S&P Global consensus, revenue modestly missed ($20.20M actual vs $20.67M estimate*) and EPS missed (−$0.22 actual vs −$0.185 estimate*); Q1 had a revenue beat but EPS shortfall*.
  • Management reiterated FY2025 revenue guidance of $85–$88M (23–27% YoY) and emphasized commercial execution under newly appointed President Jeffrey Blizard, plus a NHS framework win and European launch of OviTex Inguinal, supporting OUS momentum .
  • Key catalysts: accelerating PRS adoption (53% YoY revenue growth) and Liquifix (+121% YoY), broader hernia portfolio traction (OviTex IHR +322% YoY), and improving gross margin from lower inventory charges .

What Went Well and What Went Wrong

What Went Well

  • OviTex PRS revenue up 53% YoY; PRS unit sales +40% led by larger-size PRS launch lifting ASP in the final month of Q2 .
    “These will be the largest tissue matrices available for PRS… we did see a very nice uplift in the final month” — Antony Koblish .
  • Gross margin expanded to 69.8% (vs 68.8% last year) on lower excess/obsolete inventory charges; gross profit $14.1M .
  • OUS traction: Europe sales +25% YoY with +29% unit growth; NHS England awarded a 4-year framework for OviTex, improving procurement access .

What Went Wrong

  • Slight miss vs Q2 consensus: revenue $20.20M vs $20.67M*; EPS −$0.22 vs −$0.185*; driven partly by ASP pressure in hernia from smaller-sized units and robotic mix *.
  • Operating expenses rose to $23.2M (from $22.6M YoY) on commissions, studies, development costs, and professional fees, partially offset by lower compensation/benefits from efficiency efforts .
  • OviTex unit growth moderated (+17% YoY) amid transition from complex ventral focus to full-spectrum hernia portfolio, with lower ASP categories ramping (IHR, hiatal) .

Financial Results

Core P&L vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$17.649 $18.520 $20.197
Gross Profit ($USD Millions)$11.221 $12.512 $14.105
Gross Margin %64.0% 67.6% 69.8%
Net Loss ($USD Millions)$(9.208) $(11.264) $(9.923)
Diluted EPS ($USD)$(0.23) $(0.25) $(0.22)

Actuals vs S&P Global Consensus

MetricQ1 2025 ActualQ1 2025 Consensus*Q2 2025 ActualQ2 2025 Consensus*
Revenue ($USD Millions)$18.520 $17.352*$20.197 $20.671*
Primary EPS ($USD)$(0.25) $(0.2075)*$(0.22) $(0.185)*

Values retrieved from S&P Global.

Product and KPI Detail (Q2 2025)

MetricQ2 2025Context
OviTex Revenue Growth YoY+12% Driven by unit sales growth; ASP pressure from smaller-sized units and robotic mix
OviTex Unit Sales YoY+17% Portfolio broadening to lower ASP, higher incidence procedures
OviTex PRS Revenue Growth YoY+53% Larger-size PRS launch; ASP uplift late in Q2
OviTex PRS Unit Sales YoY+40% Clinical data presentations/publications driving adoption
Liquifix Revenue Growth YoY+121% 3 national GPOs; innovative technology designation at two GPOs
OviTex IHR Revenue Growth YoY+322% +29% sequential vs Q1
OUS Sales Growth YoY+25% +29% unit growth; NHS framework agreement
Cash & Cash Equivalents$35.0M June 30, 2025 balance

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$85.0–$88.0M (23–27% YoY) $85.0–$88.0M (23–27% YoY) Maintained
Operating ExpensesFY 2025Flat to 2024 OpEx expected to be largely flattish QoQ per CFO commentary Maintained (qualitative reaffirm)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Sales force & executionHeadcount disruption; move to TM+AS model; rebuild to 76 TMs/21 ASs target Optimization/realignment; momentum carried into 2025 69 TMs/25 ASs; recruiting to 76 TMs; patient-centric culture; data tools; comp plan discipline Improving stability, disciplined execution
Product expansion (PRS, IHR, Liquifix)New PRS larger sizes planned; IHR/Liquifix near $1M each in 2024 Full U.S. launch of larger PRS; reiterated growth focus PRS +53% YoY; IHR +322% YoY; Liquifix +121% YoY with GPO innovative designation Accelerating adoption
Pricing/ASP mixASP headwinds from smaller units & robotic mix ASP pressure in hernia; PRS ASP expected stable to growing Hernia ASP pressure persists; PRS ASP uplift from large sizes Mixed: hernia down, PRS up
OUS/Europe strategyEducation & surgeon outreach ramping —Europe sales +25% YoY; NHS framework; OviTex Inguinal EU launch Strengthening OUS footprint
Market access & contractingBuilding RTM category; mitigate bundling —~25 RTM contracts; 3 national GPOs for Liquifix Improved access
OpEx discipline2025 OpEx flat to 2024; cost efficiencies 2025 OpEx expected flat Flattish QoQ cadence; T&E policy tightening; trunk stock control Cost focus sustained

Management Commentary

  • “We are at a pivotal inflection point… With the addition of Jeff Blizard, we have brought world-class leadership to our commercial team… optimizing… territory management and strategic resource allocation” — Antony Koblish .
  • “We’re going to be present during procedures… demonstrate clinical expertise… achieve superior patient outcomes. This creates physician champions that contracts alone simply cannot overcome.” — Jeffrey Blizard .
  • “Gross margin was 69.8%… primarily due to a lower charge for excess and obsolete inventory” — Roberto Cuca .
  • OUS strategy: “We were awarded a four-year framework agreement with the NHS in England… a key step forward in our international strategy” — Antony Koblish .

Q&A Highlights

  • Headcount and hiring cadence: 69 TMs and 25 ASs; target 76 TMs with active recruiting; compensation plan redesigned to retain top performers .
  • Revenue cadence: typical seasonality—step-up Q1→Q2, flatter Q2→Q3, stronger Q3→Q4; OpEx expected flattish QoQ; second half heavier than first .
  • Spend discipline and patient-centric culture: tightened T&E per AdvaMed, trunk stock/consignment controls; recruiting OR-experienced “program builders” .
  • Contracting strategy: ~25 reinforced tissue matrix (RTM) contracts; aim to transcend bundling with clinical evidence and patient outcomes focus .
  • PRS ASP uplift drivers: launch of large long-term resorbable PRS; growing clinical publications; ASP lift observed late in Q2 .

Estimates Context

  • Q2 2025: revenue $20.20M vs $20.67M consensus*; EPS −$0.22 vs −$0.185 consensus* — modest miss. Q1 2025: revenue beat ($18.52M vs $17.35M*) but EPS below (−$0.25 vs −$0.2075*). Mix shift toward smaller-sized hernia devices and robotic/MIS procedures pressured ASP, while PRS’s larger-size launch supported ASP uplift . Values retrieved from S&P Global.
  • Forward quarters: consensus points to continued gradual EPS improvement and stable revenue growth trajectory*; management reiterated FY revenue guide . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential momentum with expanding gross margin and strong PRS/IHR/Liquifix growth; expect continued mix normalization as full-spectrum hernia portfolio ramps .
  • Execution under new President focusing on patient outcomes, OR presence, and data-driven territory management should support sustainable growth and improve rep productivity .
  • OUS catalysts (NHS framework; EU OviTex Inguinal launch) enhance international growth visibility and diversify revenue .
  • Watch ASP dynamics: hernia ASP pressure from smaller-sized/robotic mix vs PRS ASP uplift from larger sizes; margin discipline aided by inventory charge reductions .
  • Guidance maintained ($85–$88M FY revenue); seasonal cadence implies heavier H2 — monitor Q3 trajectory and holiday impacts .
  • Near-term trading: modest Q2 miss vs consensus offset by strong product KPIs and margin; catalysts include contracting wins, clinical data presentations (ASPS in Oct), and hiring progress .
  • Medium-term thesis: category shift away from permanent synthetics and growing PRS adoption underpin multi-year TAM capture with improving operating leverage; maintain focus on OpEx discipline and market access expansion .