TREACE MEDICAL CONCEPTS, INC. (TMCI)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $68.7M (+10% YoY) at the top end of pre-announced results; gross margin was 80.7%. Adjusted EBITDA improved to $11.1M, up 322% YoY, with net loss narrowing to $0.5M ($0.01 per share) .
• Management initiated FY 2025 revenue guidance of $224–$230M (+7–10% YoY) and guided to breakeven adjusted EBITDA; CFO added cash burn should decrease ~50% YoY in 2025 .
• Commercial momentum supported by expanding MIS osteotomy offerings (Nanoplasty and Percuplasty) and enabling tech (IntelliGuide PSI); SpeedPlate fixation now “north of 50%” mix and active surgeons reached 3,135 (+10% YoY) .
• Estimate comparisons were unavailable due to S&P Global access limits; management noted Q1 2025 is a “tough comp,” expecting low-single-digit YoY growth in Q1 and double-digit growth in subsequent quarters (setup skewed to H2’25) .

What Went Well and What Went Wrong

• What Went Well

  • Revenue reached $68.7M (+10% YoY) at the top end of preliminary Q4 results; adjusted EBITDA rose to $11.1M as expense leverage improved and newer products gained traction .
  • Portfolio expansion into MIS osteotomy (Nanoplasty and Percuplasty) and enabling digital planning (IntelliGuide PSI) positions Treace to capture the larger osteotomy segment (~70% of bunion cases) while maintaining Lapiplasty leadership .
  • Active surgeons grew to 3,135 (+10% YoY), SpeedPlate fixation exceeded 50% mix, and FY24 revenue delivered near the top of guidance; cash and securities were $75.7M (≈$102M including revolver access) .

• What Went Wrong

  • Gross margin compressed slightly (80.7% in Q4 vs 81.6% in Q4’23) on product mix and inventory provisions; full-year operating expenses increased on stock-based comp and innovation investments .
  • Competitive dynamics during mid-2024 pressured utilization; management cited surgeon trialing and MIS interest, though noise abated in Q4 with surgeons returning to Lapiplasty .
  • Consensus estimate comparisons for Q4 were unavailable due to S&P Global request limits, constraining formal beat/miss analysis; cadence commentary highlighted a “tough comp” in Q1 2025 before back-half acceleration .

Financial Results

Notes: Segment breakdown is not disclosed; Treace reports consolidated results . Adjusted EBITDA excludes interest, taxes, D&A, share-based comp, acquisition, restructuring, customer credit loss, litigation costs, and debt extinguishment loss .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO on strategy and portfolio expansion: “We continued to execute on our strategic plan, launching multiple new technologies while improving profitability, positioning us well for continued growth in 2025 and beyond.”
• CEO on cannibalization guardrails: Lapiplasty skews to moderate–severe bunions; MIS osteotomy targets mild–moderate, limiting cannibalization. “I don’t necessarily think there’s going to be a big shift in blended ASP… this is more of a procedure volume play.”
• CFO on leverage: “We are no longer aggressively building [the sales team]… natural leverage from a more experienced sales force… improved adjusted EBITDA 50% in 2024 vs 2023 and getting the remaining 50% in 2025.”
• CEO on SpeedPlate adoption: “SpeedPlate continues to become more popular. It is now north of 50% of our overall fixation mix.”
• CEO on TAM capture via osteotomy: Achieving ~25% share in osteotomy could add “another $350 million of potential revenue… over the next several years.”

Q&A Highlights

• 2025 cadence: Q1 is a “tough comp” with low-single-digit YoY growth; expect higher growth in Q2–Q4 with a back-half weighted story as new products ramp .
• Pricing/mix vs volumes: Expect limited blended ASP impact; growth driven by higher procedure volumes with MIS osteotomy addressing mild–moderate cases, reducing cannibalization risk .
• Profitability: Leverage from a mature sales force and mix shifts; breakeven adjusted EBITDA targeted for FY 2025 and ~50% reduction in cash burn .
• Competitive dynamics: Surgeon trialing of alternatives abated in Q4; many returned to Lapiplasty during bunion season .
• Reimbursement: CMS increases are encouraging; impact assessment pending; potential to broaden access in ASC/HOPD and support premium technologies .

Estimates Context

• S&P Global consensus data for Q4 2024 revenue and EPS was unavailable due to SPGI request limits, preventing formal beat/miss analysis (tool access error). As a result, estimate comparisons could not be performed for Q4 2024.
• On Q1 2025, an analyst referenced $53M consensus revenue (+5% YoY), and management guided to low-single-digit YoY growth for Q1 with acceleration in subsequent quarters, implying potential estimate recalibration around cadence and back-half ramp .

Key Takeaways for Investors

• Q4 delivered strong seasonal performance with revenue at the top end of pre-announced results and a significant profitability inflection; continued cost discipline and maturing sales force underpin margin trajectory .
• Portfolio breadth is expanding meaningfully: Nanoplasty, Percuplasty, MicroQuad SpeedPlate, and IntelliGuide PSI should widen access and reduce MIS complexity—key to penetrating the ~70% osteotomy segment in 2025+ .
• CMS reimbursement increases for Lapidus procedures in 2025 present a structural tailwind for access and potentially mix, particularly in ASC settings; monitor margin and volume impacts as the year progresses .
• Expect a back-half-weighted 2025 as supply builds and surgeon training scales; near-term comps dampen Q1 growth, but trend should improve through Q2–Q4 .
• SpeedPlate adoption above 50% supports revenue per case and differentiation; continued innovation and configurations likely deepen share-of-wallet .
• Active IP enforcement and robust patent estate provide defensive moat; monitor litigation costs and competitive responses .
• Without consensus comparisons for Q4, focus on trajectory: YoY growth resumed, utilization improved, and guidance sets a clear path to breakeven adjusted EBITDA and reduced cash burn in FY 2025 .