SI-BONE, Inc.

quarter 2020 for earnings conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would like to hand the call over to Sikib Iqbal, Senior Director of Investor Relations at SI Bone, for a few introductory comments.

Thank you for participating in today's call. Joining me are Laura Francis, Chief Executive Officer, and Anshul Maheshwari, Chief Financial Officer. Earlier today, SF1 released financial results for the quarter ended June 30th, 2024. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. These forward-looking statements are based on the company's current expectations and inherently involve risks and uncertainties. These risks include SI Bones' ability to introduce and commercialize new products and indications, SI Bones' ability to maintain favorable reimbursement for its products and procedures, changes in payer requirements for authorization of procedures involving SI Bones products, the impact of potential economic weakness on the ability and desire of patients to undergo elective procedures, SI Bones' ability to manage risks to its supply chain, the impact of future capital requirements driven by new product introductions, and risks to the continued renormalization of the healthcare operating environment. Other forward-looking statements include our examination of operating trends and our future financial expectations, such as expectations for physician training and adoption, active physicians, new products, and clinical trial enrollment, and are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our most recent Form 10-K filed with the Securities and Exchange Commission. During the call, management may also discuss certain non-GAAP measures, including the company's adjusted EBITDA results. Unless otherwise noted, any reference to profitability is in terms of adjusted EBITDA. For a reconciliation of these non-GAAP measures to GAAP accounting, please see the company's full earnings release issued earlier today. Unless otherwise noted, all results are compared to the comparable period in the prior year. SI-Borne disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast today, August 5th, 2024. With that, I'll turn the call over to Laura.

Thanks Aqab. Good afternoon and thank you for joining us. I'm pleased with our team's execution as we delivered another strong quarter and set new records across several key metrics. In the second quarter, We delivered a record $40 million in worldwide revenue, representing 20% growth. US revenue was a record $37.8 million, representing 21% growth, as we benefited from strengthening demand for our growing number of solutions. We added 220 active physicians in the quarter compared to the prior year, hit another new record for active physicians, and completed record-breaking number of new physician trainings in the quarter. Our second quarter results are indicative of the company's transformation from a single product company to a unique, high-growth medical device platform. We have a proven track record of identifying and successfully developing new markets with large, unmet clinical needs across sacral pelvic conditions. Complementary markets in pelvic fixation and trauma have doubled our total target procedure volume to approximately half a million annual procedures, driven deeper physician penetration, and allowed us to deliver 20-plus percent average revenue growth over the last three years. We also made dramatic progress on our profitability goals in the quarter as we delivered a 43 percent improvement in our adjusted EBITDA, Over the last three years, we've achieved over 30 percentage points of improvement in adjusted EBITDA margin. We continue to achieve significant operating leverage in the business, driven by our strong revenue growth, increasing use of our hybrid commercial model, and scalable corporate infrastructure. Given the durability of the tailwinds in our business, we expect revenue growth to accelerate in the second half. driven by the continued physician growth across all our markets, procedure volume growth across surgeons and interventional spine for SI joint dysfunction, and acceleration in demand for our pelvic fixation solutions. We expect this top line growth to translate to positive adjusted EBITDA in the fourth quarter of 2024. This inflection in our adjusted EBITDA profitability combined with our solid liquidity as well as our capital-efficient model, will give us the flexibility to self-fund our future growth. We're also positioned to capture the large, numerous markets in the sacral pelvic space and deliver sustainable and profitable revenue growth going forward. Now, let me provide an update on our key initiatives as we look to extend our leadership, drive long-term growth, and create shareholder value. Starting with sales infrastructure, We ended the quarter with 84 territory managers supported by clinical support specialists and third party agents for case coverage. Our hybrid commercial strategy drove a 24% increase in our trailing 12 months revenue per territory to a record $1.7 million. Our differentiated portfolio is attracting the attention of multiple large regional distributors who've expressed interest in building agency partnerships. We continue to expand our agent network, primarily for pelvic fixation and trauma opportunities. The expansion of our agent network is allowing us to reach more physicians and also drive incremental operating leverage in the business. Concurrently, we plan to selectively and strategically hire additional territory managers to ensure that we can expand our physician users and density, as well as provide the highest quality of service to our growing user base. Moving on to physician engagement, we exited the quarter with more than 1,150 active physicians, representing 23% growth. This is a continuation of the double-digit growth in active users we've seen in the last three years. In the second quarter, 17% of our active physicians used more than one of the procedural solutions we offer. The 25% increase in the number of active physicians performing more than one type of procedure highlights the synergistic nature of our portfolio. With the launch of Granite 9-5 solution, we're targeting both deformity and increasingly degenerative spine procedures, which account for a significant portion of the procedure volumes for active physicians. We now have a platform to drive deeper engagement and more procedures per physician. this cross-portfolio interest is a positive leading indicator of sustained demand momentum and productivity. Moving to our academic program, we trained 80 residents and fellows in the second quarter, bringing the total number of trained residents and fellows to over 1,700 since 2018. This effort translates into a growing number of physicians trained who now understand the incidence and diagnosis of sacropelvic disorders and treatment options using our technologies. We're encouraged by the elevated interest in training and the adoption trends by previously trained residents and fellows. In the first half of 2024, sustained adoption from previously trained residents and fellows resulted in revenue attributable to this group growing 75%. Turning to products and clinical evidence, We continue to define the SI joint dysfunction, pelvic fixation, and pelvic trauma markets and reinforce our commitment to improving patient outcomes and advancing medical care by offering differentiated products backed by clinical evidence. We recently finalized five-year follow-up data for SALI, our first prospective clinical trial with iFEWS3D. The study indicated that the clinical response to SI joint fusion using iFuse3D showed marked, immediate, and sustained improvement in all outcome measures, consistent with our prior SI joint fusion studies. The patient pain score improved by 58 points. The disability scores improved by 25 points, while the percentage of people on opioids decreased from 57% at baseline to 17% at five years. The physical function tests showed persistent improvement from baseline and the long-term radiographic analysis was positive with 100% rate of joint fusion. Our physicians have migrated from the original iFuse to iFuse 3D due to porosity and fenestrated design, driving faster and better fixation and fusion. iFuse 3D accounts for almost the entirety of our triangular titanium implant revenue, and is patented through 2035. iFEWS-TORC, building on the success of iFEWS-3D, continues to be a key contributor to procedure volume growth and active physician engagement across both SI joint dysfunction and pelvic trauma and has been a cornerstone of our interventional spine engagement strategy. While we provide comprehensive training on both iFEWS-INTRA and iFEWS-TORC, in the second quarter, The majority of the cases performed by interventionalists utilized iFEWS-TORC in a lateral transfixing trajectory, which is reimbursed under CP2 code 27279. The growing confidence of interventionalists in adopting iFEWS-TORC aligns with the early outcomes we're seeing in our prospective multicenter interventionalist DAISY study. Interim results, which were recently presented at the American Society of Pain and Neuroscience Annual Meeting in Miami, confirmed the safety and efficacy of lateral transfixing SI joint fusion when performed by interventionalists. The safety and effectiveness of the lateral procedure with ifuse torque was also confirmed in a recent publication in the Journal of Pain Research by Dr. Michael Jung, a leading interventional spine physician at Wisconsin Spine and Pain. Dr. Jung published the results from his first 49 lateral SI joint fusion cases using IFUSetor. The outcomes were commensurate with those observed in a large meta-analysis of studies of lateral SI joint fusion published last year. At an average of six months of follow-up, 88% of patients reported at least 50% improvement in pain. Since its launch in 2022, iFuse Bedrock Granite has been highlighted as one of the most innovative products by our customers and has seen rapid and durable adoption. Even with the rapidly increasing demand, we still have a large under-penetrated opportunity. We believe that granite will become the standard of care for fixation and fusion of the SI joints to provide a strong foundation at the base of long construct procedures, addressing a clear unmet clinical need in spine surgery. Granite has also found significant application in shorter two to four level lumbar fusion procedures. In the second quarter, we launched Granite 9-5 to address the specific needs of this broader category of lumbar fusion procedures. We believe that Granite 9-5, including shorter lengths appropriate for placement in the S1 pedicle, will provide the best in class offering for the approximately 100,000 annual target procedures. It will also allow us to engage deformity surgeons who have expressed an additional preference for a smaller diameter implant to better enable two points of pelvic fixation. The reception for Granite 9-5 has been spectacular. Looking ahead, we have an active pipeline of differentiated products that will be launched in the coming months and years, beginning with the fourth quarter launch of a product specifically targeting the pelvic trauma market. Before Anshul discusses our financial performance, let me provide a quick update on the recent additions to our board of directors. On June 25th, our shareholders elected Thomas West to our board of directors at our annual stockholder meeting. Tom is the CEO of Nalu Medical, a privately held medical device company with a leading position in peripheral nerve stimulation, selling primarily to interventional pain physicians. Tom built his career at Johnson & Johnson and Whole Logic, and was recently CEO of Intersect ENT, up to its acquisition by Medtronic. Today, we also announce the appointment of Dan Wolf to our board. Dan is currently the Senior Vice President and Chief Strategy and M&A Officer at Baxter International. Previously, Dan held positions of increasing responsibility at Medtronic, including business development, and operational leadership of Medtronic's push into personalized spine surgery with the acquisition and management of MediCrea. Tom and Dan bring a great mix of operational and strategic medical device experience across spine surgery and interventional pain and are tremendous additions to our board of directors. With that, I'll hand the call over to Anshul.