Sign in

You're signed outSign in or to get full access.

TB

TELA Bio, Inc. (TELA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue grew 9% YoY to $20.7M but missed consensus ($21.78M*) while diluted EPS of $(0.19) modestly beat consensus ($(0.20)*); gross margin held ~68% as operating leverage improved with S&M spend ratio stepping down through 2025 .
  • Management reset FY25 revenue outlook to “at least 16%” growth vs. 2024 (down from prior $85–$88M, +23–27%) and offered a preliminary FY26 view of “at least 15%” growth as salesforce rebuild ramps .
  • Balance sheet fortified via Perceptive Advisors credit facility upsized to up to $70M (initial $60M drawn; 7.85% + max(1M SOFR, 4.25%); interest-only to 2030) and a $13.0M underwritten registered direct equity offering, adding ~+$26M net cash pro forma .
  • Commercial execution milestones: 76 territory managers in place; partnership with AMS Liquifix delivered its best quarter with 126% YoY user growth; continued international traction (U.K./EU) .

Values marked with * are from S&P Global consensus.

What Went Well and What Went Wrong

What Went Well

  • Commercial rebuild gaining traction: “we reached our 2025 budgeted commercial headcount target of 76 territory managers,” positioning for sustained growth and faster rep ramp in 2026 .
  • Partner momentum: Liquifix fixation had “best revenue quarter ever … highlighted by 126% growth year-over-year with the user base,” reinforcing co-selling leverage with AMS .
  • Operating discipline: S&M as % of revenue improved from 89.7% (Q1) to 83.5% (Q2) to 73.6% (Q3), supporting narrowing operating loss YoY ($7.6M vs $9.4M) despite growth investments .
  • CEO tone: “changes … are translating into tangible momentum,” with a foundation “to re-accelerate growth in 2026” .

What Went Wrong

  • Top-line below Street: Q3 revenue $20.7M vs $21.78M*; management reset FY25 growth to ≥16% (from +23–27%), reflecting softer near-term trajectory than previously expected .
  • Pricing/mix pressure: ASPs declined in hernia on mix shift toward smaller sizes and robotically compatible offerings; PRS unit growth modest (+3% YoY) despite category growth focus .
  • Cash burn persisted: quarter-end cash fell to $29.7M with ~$5.7M use in Q3 prior to financing; pro forma liquidity improved post debt/equity, but profitability still targeted at “high $20s” quarterly revenue run-rate .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025Q3 2025 Consensus*
Revenue ($)$18,957,000 $18,520,000 $20,197,000 $20,689,000 $21,782,400*
Diluted EPS ($)$(0.42) $(0.25) $(0.22) $(0.19) $(0.20)*
Gross Margin (%)67.8% 67.6% 69.8% 67.5% —
Operating Expenses ($)$22,223,000 $22,984,000 $23,186,000 $21,523,000 —
Loss from Operations ($)$(9,365,000) $(10,472,000) $(9,081,000) $(7,554,000) —
Net Loss ($)$(10,372,000) $(11,264,000) $(9,923,000) $(8,603,000) —
Cash & Equivalents ($)$52,670,000 (12/31/24 ref) $42,833,000 (3/31/25) $34,977,000 (6/30/25) $29,713,000 (9/30/25) —
  • Q/Q: Revenue +2.4% vs Q2; Gross margin down ~230 bps vs Q2; EPS improvement of $0.03 vs Q2 .
  • Y/Y: Revenue +9.1%; operating loss and net loss both improved vs Q3’24 .

Segment/Product KPIs (Q3 2025)

  • OviTex revenue +6% YoY; PRS revenue +12% YoY; OviTex units +22% YoY; PRS units +3% YoY .
  • Liquifix user base +126% YoY; best quarter to date for the product .
  • International: continued traction; U.K. NHS value-based procurement progress; IHR EU launch contributing .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth vs 2024FY 2025$85.0–$88.0M (+23% to +27%) At least +16% Lowered
Revenue Growth vs 2025FY 2026—At least +15% (preliminary directional) New preliminary outlook
OpExFY 2025“Flat to 2024” (prior reiteration) Aim to keep OpEx “reasonably flattish” while expanding salesforce Maintained tone

Financing/Balance Sheet (Subsequent/Concurrent)

  • Perceptive credit facility up to $70M: $60M initial; $10M additional upon revenue threshold; matures Nov 14, 2030; rate = 7.85% + max(1M Term SOFR, 4.25%); interest-only to maturity .
  • $13.0M underwritten registered direct equity offering priced at $1.11/sh and $1.1099 per pre-funded warrant; closing expected Nov 17, 2025 .
  • Combined transactions add ~+$26M net cash and provide incremental $10M availability upon TTM revenue target .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2/Q1)Current Period (Q3 2025)Trend
Salesforce scale & rampOptimizing sales org; appointed President; reiterated growth plan 76 TMs achieved; targeting 90+ in Q1’26; faster hiring/competency ramp Positive execution, acceleration into 2026
Pricing/mixRobot/mixed shift pressured hernia ASPs Continued ASP pressure from smaller-size mix; unit growth offset Ongoing headwind; manageable with unit growth
International expansionEU IHR launch; growing OUS sales U.K. NHS value-based procurement progress; U.K./EU traction Building steadily
Partner products (Liquifix)Strategic partnership emphasized Best quarter; 126% YoY user growth Strengthening
Operating leverageGoal to reduce OpEx intensity S&M ratio fell Q1→Q3; operating loss narrowed YoY Improving
Capital strategyNo prior refinancingUpsized debt; equity raise; cash runway “more than enough to reach profitability” De-risked liquidity
R&D/clinicalPRS launch; evidence base growing Hiatal study first patient enrolled; 100k+ combined implantations Evidence/usage base expanding

Management Commentary

  • CEO: “We reported revenue of $20.7 million… 9% growth… strengthened our operational foundation… reinforced our balance sheet to eliminate any concerns around financing and allow us to focus squarely on execution and growth” .
  • President: “We… reached our 2025 budgeted commercial headcount target of 76 territory managers… best revenue quarter ever with Liquifix, highlighted by 126% growth year-over-year with the user base” .
  • CFO: “We now expect revenue for the full year 2025 to grow at least 16% over 2024… revenue in full year 2026 will grow at least 15% from 2025” and “break-even… in the high $20s” quarterly revenue with flattish OpEx .

Q&A Highlights

  • Liquidity rationale: Refinanced before prior facility amortization; combined debt + equity adds ~+$26M net capital; plus $10M potential tranche at $100M TTM revenue target; runway “much more than enough to get us to profitability” .
  • Guidance reset and FY26 outlook: Reset FY25 to ≥16% to provide base after Q4 reset; preliminary FY26 ≥15% embeds hiring cadence and conservative ramp assumptions .
  • Salesforce expansion: 76 TMs in Q3; aiming 90+ in Q1’26; improved hiring profile and faster time-to-competency; top 50–52 rep cohort tracking ~$1M annualized each .
  • Profitability bar: Break-even still “high $20s” revenue per quarter; plan to keep OpEx flattish despite salesforce growth via internal promotions and cost efficiency .
  • Q4 setup: Incentives in place; leadership upgrades in weaker regions; room for upside but guidance framed conservatively .

Estimates Context

  • Q3 2025: Revenue $20.689M vs $21.782M* consensus (miss); EPS $(0.19) vs $(0.20)* (beat by $0.01); 5 estimates on both EPS and revenue* .
  • Prior quarters: Q2 revenue $20.197M vs $20.671M*; EPS $(0.22) vs $(0.185); Q1 revenue $18.520M vs $17.352M; EPS $(0.25) vs $(0.2075)*.
  • Implication: FY25 consensus likely requires downward adjustment given formal guide to ≥16% growth and soft Q4 setup; FY26 could be reset higher or lower post Q4 as hiring productivity becomes clearer .

Values marked with * are from S&P Global consensus.

Key Takeaways for Investors

  • Near-term reset: Revenue miss and FY25 guide-down to ≥16% are near-term overhangs; however, EPS modestly beat and operating leverage improved, softening the downside narrative .
  • Liquidity de-risked: Upsized Perceptive facility and $13M equity raise bolster runway, enabling continued salesforce expansion toward the “high $20s” break-even threshold without near-term capital risk .
  • Execution watchlist: Track rep count progression (to 90+ in Q1’26), Liquifix adoption, and PRS momentum; if the top cohort’s ~$1M annualized productivity scales, 2026 growth ≥15% looks achievable .
  • Mix/ASP headwind: Continued shift to smaller hernia sizes and robotic procedures pressures ASPs; sustained unit growth and PRS mix are key offsets to protect margins/revenue growth .
  • International optionality: U.K. NHS procurement progress and EU IHR launch provide incremental growth channels with strategic cadence into 2026 .
  • Trading lens: Near-term sentiment likely hinges on Q4 delivery vs the reset bar and evidence of rep productivity ramp; balance sheet actions reduce downside tail risk while leaving upside to 2026 execution .

Appendix: Additional Data Tables

Product-Line and KPI Snapshot (Q3 2025)

MetricQ3 2025
OviTex Revenue Growth YoY (%)+6%
OviTex Units Growth YoY (%)+22%
PRS Revenue Growth YoY (%)+12%
PRS Units Growth YoY (%)+3%
Liquifix User Base Growth YoY (%)+126%
Gross Margin (%)67.5%
S&M as % of Revenue (progression)89.7% (Q1) → 83.5% (Q2) → 73.6% (Q3)
Cash & Equivalents ($)$29.7M

Press Release and 8-K Source Highlights

  • Q3 PR and 8-K: Revenue $20.7M; GM 67.5% (vs 67.8% LY); OpEx $21.5M; net loss $8.6M; FY25 guide ≥16%; Perceptive facility terms; conference call details .
  • Q2 PR: Revenue $20.2M; GM 69.8%; reiterated FY25 $85–$88M guide .
  • Q1 PR: Revenue $18.5M; GM 67.6%; reiterated FY25 $85–$88M; OpEx flat to 2024 .

All document citations: [1:x]=Q3’25 earnings call transcript; [3:x]=Nov 13 equity offering PR; [4:x]=Q3’25 8-K and exhibits; [5:x]=Q3’25 financial results PR; [9:x]=Q2’25 PR; [24:x]=Q1’25 PR.

Values marked with * are from S&P Global consensus.