SI-BONE, Inc.

reimbursement landscape, and post-IPO investments in the business that we'll carry into next year. With that, I will now turn the call over to Laura Francis, our Chief Financial Officer and Chief Operating Officer, to provide more detail on our financial results.

Thanks, Jeff. Third quarter total revenue of $20.4 million increased 26% compared to the prior year period. US sales of $18.9 million, which accounted for approximately 93% of total revenue in the quarter, increased 27% compared to the prior year period. International revenue of $1.4 million increased 9% compared to the prior year period. Monthly revenue trends were more evenly distributed throughout the quarter. with July being our strongest month driven by additional rescheduled cases from the second quarter of 2020. We believe that we ended September with a more normalized backlog. We also believe backlog contributed mid-single digits to growth in the quarter. We ended the quarter with 59 direct sales reps and 57 clinical support specialists, We've accelerated our hiring of field personnel and are aiming to finish the year at 63 to 66 direct sales reps and 58 to 61 clinical support specialists. Additionally, we ended the third quarter of 2020 with a record 567 active surgeons, up from 455 in the second quarter of 2020. Gross margin for the third quarter of 2020 was 87%. compared to 90% in the third quarter of 2019. The decrease in growth margin was primarily due to an increase in inventory write-off and higher costs of operations to support the growth of the business in the third quarter of 2020. Operating expenses increased 5% to $26.5 million in the third quarter of 2020, compared to $25.1 million in the third quarter of 2019. Costs increased due to higher employee-related costs and stock-based compensation due to the higher headcount, mainly from sales hiring. We also made additional investments in research and development for our new product launches planned for 2021. The increase was partly offset by the reduction in general and administrative expenses in the third quarter of 2020, primarily due to the accrual of estimated settlement costs of the TCPA class action lawsuit of $2.5 million in the third quarter of 2019. Our operating loss for the third quarter of 2020 was $8.7 million, compared to an operating loss of $10.6 million in the third quarter of 2019. Our net loss was $9.5 million, or 33 cents per diluted share for the third quarter of 2020, as compared to a net loss of $11.3 million, or 46 cents per diluted share in the third quarter of 2019. Cash and marketable securities were $132 million at the end of the third quarter. To further strengthen our balance sheet, we completed a follow-on offering with net proceeds of $71.9 million in October of 2020. Based upon our current operating plan, we believe that our existing cash and marketable securities will enable us to fund our operating expenses and capital expenditure requirements. While encouraged by the rapid recovery in our business and growth in the third quarter, we remain cautious about the fourth quarter, given the uncertainty surrounding flu season and resurgence of COVID-19 cases and its potential negative impact on ASCs and hospitals globally. It's also important to point out that the fourth quarter of 2019 was our strongest growth quarter as a public company at 27%, making for a difficult comparison year over year. With those caveats, we are reiterating our full year 2020 guidance range of $73 to $74 million, representing growth of approximately 8% to 10% over 2019 revenue. I'll now turn the call back over to Jeff for closing comments.

Thank you, Laura. In closing, our confidence in the opportunity in front of us for the business and for shareholders is stronger than ever. With the additional funding, we have put in place an accelerated investment and growth plan. Most importantly, it will help us achieve our mission to help many more patients. Direct-to-patient initiatives, increased surgeon training, additional field sales personnel to educate and support the surgeons, new product development and automation and scaling initiatives are the five key focus points of our investment strategy. With reimbursement broadly established in the U.S., we believe that now is the time to invest in substantial growth in our market. And as the market leader, we and our shareholders will be the beneficiaries of that market expansion. Thank you for joining the call today. We will now open it up to questions. Operator?