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?

Thank you. To ask a question, you will need to press stars and 1 on your telephone. To withdraw your question, please press the pound key. Our first question comes from a line of David Lewis with Morgan Stanley. Your line is now open.

Good afternoon. Thanks for taking the question. Just a few quick ones for me. Maybe, Laura, I'll just start with you on resurgence. And I think your comments are pretty much on par with what most companies have suggested here into the fourth quarter. I wonder if you just could help us out a little bit with anything you saw now that we're in November with kind of October trends relative to September. And we appreciate resurgence is likely to be a factor, but has resurgence been a factor yet in terms of how you think about your business here in the fourth quarter?

Thanks, David. You know, obviously we just finished the month of October. From a general perspective, you know, we did talk about resurgence. It's very similar to where we saw hotspots, you know, in the third quarter where you can see, you know, certain cases that will be canceled, you know, but then they try to pretty quickly get back online. And so In terms of what we've seen starting into the fourth quarter, the fourth quarter has started out in a way that's very similar to what we saw in terms of trends in the third quarter.

Okay. And are you comfortable saying if October was a sequential improvement relative to September?

So what I'm saying is it's consistent. What I'm saying is it was consistent. And I did even make a comment in my pre-stated remarks where we talked about, in fact, from the perspective of the cadence in the third quarter, July actually was the stronger month compared to August and September. And the reason for that was we do believe that we worked through all of the remaining backlog of cases during that month. And so, you know, we saw more of a normalized business in August and September and continue to see those trends into October. Jeff, any other comments from you?

Well, I would just add that, you know, we're continuing to see strength in the U.S. We have, David, specifically your question, you know, you asked, have we seen any resurgence? We've seen a little bit in Europe. We really haven't seen anything in the U.S. to speak of.

Okay, very clear from my perspective. And then, Jeff, look, the equity offering, you may have surprised some, right, because you had a pretty good balance sheet and you raised a lot more money, so you're well capitalized. And you definitely described some areas where you're putting that money to work, surgeon training, simulators. But if we could quantify some of those investments, and I appreciate they won't hit 21, but I think about – you adding maybe 15 people to the commercial organization in 2020. I mean, can we be talking about a situation where that type of number doubles or triples, so you could add 30 or 45 people to the commercial organization in 2021? I know you gave us the simulator number, but just sort of curious how the commercial reps could expand, and then one quick one for Laura, and I'll jump back into you.

Well, I mean, as Laura said, you know, we – This year alone, we'll get up to 63, 66 reps and up to 58 to 61 clinical support specialists. We do see, David, a significant increase in the field sales force compared to this year. We wouldn't have raised the money if we didn't really feel it was time to step on the gas. I'm a little reluctant to give out an actual number. It's sort of like giving out the guidance right now for 2021. But suffice it to say, the accelerated plan, as we call it, calls for pretty aggressive hiring, more regions, and significant investment there. We are going to be pretty aggressive on the rep side, as well as the product pipeline, as well as, you know, we mentioned getting up to 25 simulators, and we continue to see on the simulator side tremendous strength and interest from the surgeons into October. So we're hyper-encouraged with the you know, the bookends of sales reps and training. And then, you know, we are going to layer in, you know, more direct-to-patient capabilities. Next week we're actually going to start some test market TV ads that we've been testing on radio and are encouraged by that. So we think those three things sort of set up all together to really have a great 2021.

Okay. And just last for me, I'll jump back in queue, Laura. I mean, I know it's early, but if I annualize your fourth quarter number, I get something in the low 90s, and you've been showing some sequential momentum in the business. So I look at street consensus for next year in sort of 94-ish range, which ain't much above, frankly, the annualized rate of the fourth quarter, if I assume sequential improvement. Any comments you'd be willing to kind of offer on 21 in terms of, you know, where the – The street sits are, frankly, any parameters on 21 we should be thinking about for our models. Thanks so much.

Thanks, David. We're obviously looking very carefully at the fourth quarter of 2020, and, you know, the way that our business works is there is some seasonality in the business, and typically the fourth quarter is the largest quarter of And then we normally see a little bit of a decline into the first quarter or a jump up into the second relatively flat third quarter and then another jump into the fourth quarter. And so our intention is to provide more guidance on our next call because we really would like to see where this fourth quarter ultimately ends up. But we are We are bullish on the business. We're seeing all of the investments that we made in the business continue to drive strength even in this difficult environment. We are going to be making additional investments with the proceeds from the offering. As I said in my pre-prepared remarks, we don't expect for that to have a significant impact on 2021, but we think that all of the investments that we made, especially in 2019, given that it takes around 12 months for our salespeople to become productive, that those are going to be bearing fruit for us next year.

Thank you. Our next question comes from the line of Bob Hopkins with Bank of America. Your line is now open.

Hi, thanks and good afternoon. So I apologize for the short term oriented follow up, but it's a unique environment we're in here. So it sounds like in the third quarter that, you know, July was the best month. So that implies that, you know, to get to the Q4 guidance, you do need to see some kind of nice improvement from current trends to get to the midpoint of that Q4 implied guidance that you're giving. Is that correct?

No, it actually doesn't. In my pre-prepared remarks, we grew by 26% in the quarter. As I said, if you took out the growth that we saw from rescheduled cases, that growth accounted for mid-single digits. So let's say without those rescheduled cases, we were in approximately the 20% range in terms of our growth for the quarter, just new cases. And the guidance that we've provided is anywhere from 11% to 15% growth for the fourth quarter in order to get to the numbers that we've provided. So as I said, we continue to see trends that are similar in starting into the fourth quarter. And, you know, we are we are cautious because of because of COVID. But the underlying business is performing quite well.

Oh, I see. So you're you were talking about similar in terms of year over year growth, I was thinking more in terms of sequential revenue dollars.

So I think no year over year growth is what I'm referring to.

Okay, okay.

And, Bob, most of those rescheduled cases were in July. There was almost no rescheduled cases that affected August and September. And so, you know, if you take that sort of mid-single digit, you know, call it 5% ballpark-ish and take it off the 26%, you can sort of figure out the math there. Sure. August and September were still very good months, but there was a little chip in in July.

Got it. And, Jeff, how's Bedrock doing relative to your expectations and, you know, your thoughts on continued momentum with that product?

We're extraordinarily bullish. You know, we've said publicly, Bob, that we're in more than 20 academic institutions currently. That's sort of a base number. We are seeing just great interest in that whole thing. We've done cases at UCSF and Mayo, and the numbers continue to be ahead of our expectations. We're not going to break out the numbers right now. The two pieces of that, as we talked about, both the trickle-down effect, getting us into these academic centers, as well as some revenue from that, both of those things are ahead of our expectations. So we expect great things from Bedrock in 2021. And as we talked about in the product pipeline, there is more coming in that area, which we think will impress a lot of people. and continue the momentum in adult deformity as well as trauma and base SI joint fusion. Still, we think the vast, vast majority of our revenue will be SI joint fusion, but it's been just a great addition to the company's portfolio.

When does that incremental pipeline visibility come, Jeff?

The first product will come in the first half, Bob, sort of midway, probably closer to the early part of Q2. And the second product line will be launched in the earlier part of the second half of the year. So, you know, there's a good cadence there to roll those out and, you know, both of those things are very much on track. Great.

Thanks very much.

You're welcome.

Thanks, Bob. Thank you. Our next question comes from the line of Kyle Rose with Canaccord Genuity. Your line is now open.

Great. Thank you very much for taking the questions. So I just wanted to ask just more of a general question. Just given you increased the war chest with the recent financing, Obviously, you've been executing well from a trend perspective. Just trying to understand how we should think about the return on investment from the incremental investments you're going to make. I know, Jeff, you talked about maybe laying the groundwork in 21 to realize growth in 22. But should we expect to see an acceleration from these growth levels? Is it going to allow you to sustain the current growth levels for a longer period of time? Just from a high level, how you view those investments. And then secondarily, from a sales rep perspective, one of the areas we see smaller companies sometimes struggle or have a hiccup is when they make material investments or expansions in the sales organization. You're dividing territories, adding on just a lot of humans at the same time. How do you expect to make sure that you manage through that process and maybe don't realize some of those issues that some of the predecessors in the space have?

Yeah. So there's really two questions there, Carl. Thank you. The first question at a high level is I think most people do or, if I can be bold, should think about us as a sort of 25% growth company. Um, you know, in the fourth quarter of last year, we were 27% growth. We were 26% this, this last quarter, you know, you could take out a little COVID, but if there wasn't COVID, we probably would have been at 30%. So, you know, at a high level, we're thinking about all these investments. That's the direct to patient investments, uh, the surgeon training investments, the Salesforce investments and the product investments, um, so that we can get from a 25% growth company to, you know, call it a 35% growth company. Exactly when that happens is the question. Now, as we said earlier, you know, some of these things, as you know, it takes time with the sales force. The simulator training stuff is going better than we had expected. You know, we'll get into guidance next year, but at a very high level, given how big the opportunity is, how absolutely sure we are about the opportunity. The whole goal of this investment strategy is to create a more frictionless growth environment. And as we talked about, that goes with making sure the surgeon payment is there so they're happy with that, making sure that the coverage is there so they don't have to spend four hours, making sure they can get trained very easily instead of getting on a plane to go someplace else, they can get trained within a few days, making the whole process simpler and easier. And that obviously comes with more products so that they can do more things more effectively. And we just philosophically believe that if you create a more frictionless environment for the surgeons to because this is a big market, that you can grow the market overall and that we will be the beneficiaries there. And so we're really thinking about these things, you know, whether that happens later next year or into 22, but it's really how do we make these investments and grow the market at a higher growth rate in the future. And so that's philosophically important. where we are in that. And your second question, I didn't write it down.

Just around with the expansion of the sales organization in 2021, thoughts about managing through that to make sure there's no potential hiccup or slowdown in growth in the interim.

I don't think we could have a better guy at the helm or gal at the helm than Tony Recupero. I think that, as you know, Tony grew that Kaifon sales team, basically doubled it every single year for multiple years. I think Tony knows how to do that. His senior management team, including the VP of sales of the U.S., Troy Wallemeier, his area vice presidents, many of them were at Kaifon. They understand the sensitivities, the importance of supporting our current sales team, making sure the right financial incentives are there. When you do have territories that get changed, that we put in financial protection for some period of time or overrides or those kinds of things and manage that like we care about every single sales rep in the field. And we do because they're a powerful, terrific, very talented group. And so I have tremendous confidence in Tony and his management team to work through that. And I think as well, the sales team in the field understands that, and our discussions with them are very frequent, that we're trying to grow the overall business. How do we get to 300 million, 400 million, 500 million as a market? And they know that this is coming. It's not some secret. We don't surprise people. And so our confidence level there is really, really quite good.

Thank you very much for taking the questions. You're welcome.

Thank you. Our next question comes from the line of Dave Turkeley with JMP Securities. Your line is now open.

Great, thanks. He called out faster adoption of iFuse 3D in your gross margin commentary. And I was just wondering... Is that everywhere now? And then could you also comment on any impact that might have had on ASP or anything else might have had on ASP, you know, given where we stand with COVID today? Thanks.

Laura, you want to jump in and take this one?

Yeah, sure. So we have seen a very strong uptake of ICUs3D. I talked about it from the perspective of the gross margin in particular because we did have some write-offs. of iFuse inventory. And quite frankly, we were originally planning for approximately 90% iFuse 3D sales, 10% iFuse sales, and it's closer to 95.5. So there's been even a more successful rollout of that product than we had anticipated. In terms of ASPs, it doesn't have a really significant impact on ASPs. So it's been a good transition of the business.

And I guess as a quick follow-up, at your NAS event, the doctors were talking about pelvic fixation, failure rates, backouts, revisions, and the like. And I guess I'd just like to get your thoughts on Sort of where that stands today, because we heard a couple different numbers from a couple different people, but it certainly seems like the competitive devices have more issues. Thanks a lot.

Well, I think you have to break it down, David, into the different areas. SI joint fusion, our revision rates that are published out there on the first 11,000 cases, and as you know, we're over 50,000 cases, uh... was a little over three percent most most revision rates in spine or over ten percent uh... more currently with iphys 3d because of its porosity and its characteristics and the learning curve uh... and uh... more seasoned sales force our revision rates are running uh... a little more than one percent uh... so uh... you know, some of the competitive products, I can't imagine that they're there with those kinds of rates. You know, they have nothing published, but I think it has to do with the tremendous porosity of the product, its fusion capabilities, and so I think that compared to the competitors in SI joint fusion, that's very, very, very positive. When you move to, and I think you're referring to Bob Eastlack, who talked about some of the breakage levels and revision rates at the bottom of adult deformities, and that the ISSG study, which is the, you know, really some of the top, I guess it's about 30 top surgeons that are very, very focused on clinical evidence, the revision rates were running something like 27 or 29%. And I think with bedrock that you know, with a 30% increase in stabilization, you know, we're very confident, and I think the surgeons are very confident that those revision rates for adult and for many cases is going to go down. So, you know, I think all of you have talked to surgeons, and, you know, it's like putting the foundation at the bottom of a flagpole. If you put a really good one, you're going to, not have a lever kind of action at the bottom of flagpole and so i think it's very natural and i think uh it's it's having a very positive effect uh real time we're investing in the sylvia study um we're we're now over 25 uh patients enrolled in that study and and we're trying to get to 50 uh maybe even by the end of the year. I don't think we'll get there, but we might. So we're investing in that clinical evidence because we think clinical evidence is the foundation of almost everything. Thank you. You're welcome.

Thanks, David. Thank you. Our next question comes from the line of Brandon Folks with Cantor Fitzgerald. Your line is now open.

Hi, thanks for taking my questions and congratulations on a great quarter. Maybe first, and I apologize if you didn't answer this, on the Anthem reimbursement, did they provide any feedback in terms of why you were not included in the policy update? And then my second question, I'll just ask them both, I'm fine, just maybe, can you talk a little bit about your potential for direct-to-patient marketing? Thank you.

Sure. So on the Anthem piece, you know, as we talked about, Brandon, we certainly expected them to do something, not because they told us, but they told surgeons. And so I guess they just didn't get to it. Whether that was a COVID thing or dragging their feet, I don't know. We have had communication that it's under review and, you know, it will be – It's going to be reviewed in the future. I don't know whether that's Q1 or Q2 or Q3 next year. I'm reluctant to even say. I have a very good feeling. We've been told what the timing is, but I'm reluctant to say given that they've missed deadlines even though they've communicated. I think with 115 payers in the United States and 300 million lives, we have to look by that and You know, we grew at 26%, and we can't control that anymore. The clinical evidence is spectacular, and there's no earthly reason why they shouldn't be covering, and I think it's just a question of time. And, you know, I know that we're not involved, but I know there's multiple patient lawsuits against Anthem, and we hope that they come to the right decision to help these patients. As to the direct-to-patient... initiatives early on in that. We do think that it's, when we've gone out and talked to a lot of patients and done some homework, we think that there's a huge number of patients out there, but there is really a lack of understanding out there among the broad population of 200 or 300 patients a year that there's a really good solution. And so I think that we're optimistic about the direct to patient initiative. We're going to pilot starting on TV next week. I think it's November 9th in a few cities. And we delayed that because of election, the elections and the cost in many cities, particularly swing state cities of political ads. But, We're gonna test that and measure the heck out of it, but we think the time is now given good coverage that a patient can go see a doctor and there's a lot of surgeons that they can go to and often time from these direct to patient initiatives they call us or they call the call center that we have set up and they ask where do I go and we give them multiple choices in any area. And we're hoping that that goes well, and we'll talk about that more in the future.

Great. Thank you very much. You're welcome.

Thank you. Our next question comes from the line of Telecom with Truist Securities. Your line is now open.

Great. Hi, Justin and Laura. Thanks for taking our questions. So you guys mentioned, I think in response to Kyle's question, that we should think about Cybone as a 25% growth company going forward. So, I mean, it's 25% sort of the low bar of what we should expect from a guidance perspective in 2021. I just want to make sure I'm clear on that comment, and then I have a follow-up on the training simulators.

Yeah, maybe I wasn't clear, Kayla. I think we're sort of a 25% kind of growth company now. Now, you know, if there's COVID resurgence in the fourth quarter, you know, who knows exactly. But, you know, we're the 27% in the fourth quarter last year and 26% in the quarter that we're talking about, IEQ3 of this year. I think of us as sort of in the range of a 25% growth company now. And the investments that we're talking about is how do we improve that growth rate in quarters in the future.

And Kayla, if you think about what we did since we went public, the first quarter that we were a public company, we grew by 13%. We obviously made significant investments in the organization. in some ways similar to what we were doing at the time that the company went public, certainly with the hiring of people in the sales force, the training of surgeons, although now with the simulator, it gives us the ability to train a lot more surgeons more rapidly and efficiently. New product development, we were working on reimbursement, which really is not much of an issue for us any longer. So As Jeff said, we grew from that 13% the first quarter we were public growth perspective to 27% in Q4 of 2019. And so the question for us is how do we continue to grow beyond that point in time or beyond that percentage? And we really know how to do it. What's Where we're at as a business, and a big reason why we did raise the additional financing, is with the challenges that we had with reimbursement, it was a little more difficult to predict exactly what was going to happen when we placed a new sales rep. There were certain sales reps where they were able to perform and hit the ground running very quickly when they entered a territory that there were others mainly due to reimbursement, whether it was the size of the payment or the coverage that was in that particular territory, we had variability in how those sales reps were able to perform. And what we're seeing now that we have the strong reimbursement that we do is we see this reproducibility of put the sales rep into the field that sales rep is going to start by developing relationships with surgeons, getting those surgeons to training, getting them to their first case, and ultimately getting them regularly diagnosing and treating patients. And so what you can do, and, you know, your model really shows this, is, you know, how do we continue to grow the business with that sort of – process in front of us. And it's partly the hiring of additional salespeople and training surgeons. And then part of it is just growing the productivity as well. So it really gives us the ability to say, you know, how much do we want to put into this business in order to drive future growth and accelerate growth beyond where we're at currently?

Okay. That makes a ton of sense. And then I guess just a couple on the training simulators. So I mean, first, you know, can you talk about sort of the cadence of how these simulators will be rolled out in 2021? It sounds like they'll be kind of scaled throughout the year pretty evenly, but just want to make sure I'm clear on that. And then you mentioned hiring more reps, but I imagine, you know, these simulators add some layer of efficiency to the business. So I guess, I mean, how big do you think your sales force ultimately needs to be longer term just in order to address sort of the broader opportunity, again, with those efficiencies in mind? Thank you.

I'll take the first question. I'll give Laura the second. So, the simulators will, the plan is to roll them all out in Q1 and a bit in Q2. So, no, they're not going to be scattered. Kayla, we're early investing on those things. So, I'm 90 plus percent sure that we will have them all out in the field by the end of June at the latest. So that's the first question, I think. And Laura, do you want to take the second around the size of the business from a sales rep standpoint?

Yeah, and I think, Kayla, you were getting at efficiencies in the business. So when we train surgeons, the sales rep is definitely involved, but it primarily involves our professional education organization. And so what this does is, there are around 6,000 surgeons in the United States that are targets for us that have not yet been trained. And so what this allows us to do with the simulator is to more rapidly train those surgeons. In terms of the productivity of the sales force, we still look at it in a very similar way, however. And it's with just a sales rep in a territory, we think that they can do approximately a million and a half of business. And then with a sales rep plus a clinical support specialist, they can do around two million of business. And the bottlenecks are, there's two different bottlenecks. And, you know, one is just covering cases because we do have either a rep or a clinical support specialist in pretty much all of our cases. The other one is just the surgeon coverage and making sure that the sales reps have the bandwidth in order to cover the surgeons who are performing the procedures in their particular territory. So when we think simplistically about our business and the size of the sales organization, we usually think about a business where Let's say we're doing 200 million of business. What we would have is 100 of our sales reps with that size of business, and they would be supported by 100 clinical support specialists.

The only other thing I'd add, just to give you some flavor, Kayla, and others on the simulators, is we are not only training surgeons. I've talked about new surgeons. I've talked about the challenge of getting a surgeon on a plane these days, getting a surgeon on a plane and taking a day and a half out of their office. We're also seeing a significant number of what we would call inactive surgeons getting trained with this new simulator. It was very difficult to predict how that would be received, but something like 30-40% of the surgeons that are being trained with the simulator are coming out of inactive surgeons so they've gotten used to it maybe they didn't have coverage maybe they didn't like the pricing or the payment whatever it is so the field team the medical affairs team is very focused on the significant number of surgeons out there who are not in the active group. And we put up a very good number in Q3 on active surgeons, but we've trained a lot more than that. And so getting those people back and active is also a major initiative in addition to training lots of new surgeons.

Thank you. Our next question comes from the line of David Saxon with Needham. Your line is now open.

Hi, Jeff and Laura. Thanks for taking my questions. I just had a follow-up on the simulators. You noted you've trained over 100 docs on the simulators you have in the field now. I was just wondering how many is that and how should we think about this incremental 25 in the field from a training perspective into this pool of 7,500 docs?

Yeah. I mean, we have, let's say, less than a handful out there now. So, you know, I don't think that we are ready to put out guidance for a number of active surgeons or surgeons trained, David, for 2021, but Obviously, going from less than a handful to 25, and there will be a couple in reserve in transit, et cetera, et cetera. But we plan on pushing those simulators out into the regions and adding to the medical affairs team to help with the training out in the field. So math-wise, you could do a little bit of math there. In October, we saw continued momentum with the simulator. We don't think it was a, hey, let's go, this is pretty cool, and all of a sudden there's this big blip in Q3. I think we're going to see continued momentum with the training, and we have seen that in October already. Of course, as we talked about, just because you train a surgeon doesn't mean that the patient's coming in and getting on getting their surgery right away because of the policies that are out there because patients have to have six months of conservative care. They're not going to, and it has to be documented. It takes time. And hence, back to Kayla's question, you know, our push is to get those things out there as soon as possible given manufacturing lead times, but push them into the first half of next year So perhaps we could see some benefit in the back half of next year in a significant way.

Great. Yeah, that's helpful. And then just a question on reimbursement or the doc fees. The proposed conversion factor I think is set to decrease, and if I was looking at it correctly, the RVUs for SI joint fusions are kind of flattish. So I know you're making a ton of investments for next year. How are you thinking about that reimbursement dynamic? Do you think these will impact the growth trajectory at all?

I don't think so at all. I think it's all relative, and I think surgeons, and I know all of you have talked to surgeons, I think surgeons think very highly of the procedure. The patients do well. The clinical studies back that up. And I think, you know, as we've talked about, I haven't heard, and I don't think Laura's heard anyone say, hey, the payments, too low this year since it's changed on January 1st. And a few dollars here or there doesn't make any difference, I don't think, in the big picture. It's more that it's in the right geography, money-wise. And we'll have to see how it plays out, but I don't think it makes any difference whatsoever.

Great. Thanks so much, and congrats on the quarter. Thank you very much.

Thank you. This concludes today's question and answer session. I would now like to turn the call back to Mr. Dunn for any further remarks.

Great. Just a quick thank you for everyone for joining. Obviously, a very good quarter. We're very pleased with how the team worked together to power through this thing and the recovery, and we are Very excited about all the growth initiatives we put in place, and we think we have a great plan for the rest of the year into 2021. So have a good rest of the day, and, again, thanks for joining. Thank you, Sarah.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a great day. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. So. Thank you. you