SI-BONE, Inc.

Good afternoon and welcome to SI Bone's third quarter 2024 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 now like to turn the call over to Saqib 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, SI Bone released financial results for the quarter ended September 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-BONE's ability to introduce and commercialize new products and indications, SI-BONE's ability to maintain favorable reimbursement for its products and procedures, changes in payer requirements for authorization of procedures involving SI-BONE's products, the impact of potential economic weakness on the ability and desire of patients to undergo elective procedures, the impact of recent hurricanes on the availability of certain consumable products used in surgical procedures, SABON's 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 physician, new products, and clinical trial enrollment, and are based upon our current estimates and various assumptions. These statements involve material risk and uncertainty 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. EssayBorne 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, November 12th, 2024. With that, I'll turn the call over to Laura.

Good afternoon and thank you for joining us. We had another strong quarter as we delivered record worldwide revenue and hit notable milestones across all our priorities. In the third quarter, we delivered worldwide revenue of $40.3 million. Reflecting 19% growth, the record revenue allowed us to make dramatic progress on our profitability and liquidity goals. We were close to adjusted EBITDA breakeven and used only $700,000 in cash in the quarter. To deliver sequential revenue growth and close in on profitability in the third quarter is a testament to the power of our expanding platform. This performance is impressive considering third quarter industry seasonality, as well as quarter end procedure disruption in certain markets due to hurricanes. Following on the phenomenal success of iFuse TORQ and iFuse Bedrock Granite 10.5 and 9.5, in the third quarter, we received 510 clearance for iFuse TORQ TNT. TNT is our second breakthrough device to launch in the last two years. The solution designed with leading trauma surgeons to treat patients with sacral insufficiency fractures, expands our presence in the trauma market with an anatomy-specific implant system that complements the surgeon workflow. We pride ourselves on disrupting traditional orthopedic and neurosurgical industry norms, which are often burdened by low margins and undifferentiated products, as well as large capital investment. With each new product launch, we are distinguishing SI Bone as an asset-like platform of anatomy-specific products that are supported by clinical evidence and favorable health economics. Looking ahead, as we capture more of the nearly half million target procedures and expand our platform, I'm confident that we can deliver industry-leading, profitable revenue growth. Now, let me dive deeper into our key initiatives as we look to extend our leadership, drive long-term growth, and create shareholder value. Starting with sales infrastructure, our surgeons are not only drawn to our comprehensive solutions, but also value the exceptional support provided by our highly experienced sales team, which remains unmatched in the industry. The combination of our direct sales team consisting of 82 territory managers and an increasing number of third-party agents has accelerated market penetration, and translated into significant operating leverage. Our trailing 12-month revenue per territory increased 21% to $1.8 million. Given the breadth of our platform and the success with hybrid commercial models, we believe we can increase the overall revenue per territory beyond our target of $2 million. Given the extensive physician interest in adopting Granite, we're actively building and in several instances expanding strategic partnerships with large regional sales agencies. With the launch of T&T, we're fielding interest from trauma-specific agencies. We've signed agreements with some large regional trauma agencies, positioning us to increase our revenue in the estimated $300 million pelvic trauma market. On physician engagement, we're delighted with the positive trends across active physician growth, procedure utilization, and cross-modality engagement. We ended the quarter with over 1,200 active physicians, an increase of nearly 150 physicians. Over a three-year period, we have nearly doubled our active physician base. We're seeing the results of our activities targeted to grow the number of physicians performing multiple procedure types and also increase the number of procedures per physician. In the third quarter, the number of physicians performing more than one type of procedure increased by 35%. Additionally, our procedure volume from physicians who were active in both the third quarter of 2024 and the third quarter of 2023 grew by 25%. The expanding physician base combined with our success in driving higher utilization and cross-portfolio interest over time gives us confidence in our long-term procedure volume growth density targets, and efficiency. Finally, we're impressed with the adoption trends from surgeons we trained as residents and fellows. Year to date, revenue attributable from previously trained residents and fellows grew more than 75%. Turning to products and clinical evidence, let me start with TNT, our next generation pelvic trauma implant system. TNT received breakthrough device designation and is specifically designed to meet the anatomical and bone density characteristics of the sacrum and ilium. TNT is unique in that it extends across the entire pelvis and delivers different fusion structures for different areas of the pelvis with the goal to facilitate bone integration. Throat surgeon excitement for TNT was evident at the recent orthopedic trauma association event in Montreal. where there were multiple podium presentations highlighting the use of TNT. The device design, its simple instrumentation, and its seamless compatibility with existing workflows resonates with surgeons. Leveraging our experience in getting a new technology add-on payment, or NTAP, for granted, we have initiated the NTAP process for TNT. If successful, the NTAP will take effect on October 2025. Given the early demand trends, we're enthusiastic about TNT's long-term revenue potential as we go after the pelvic trauma opportunity. Given its versatility, we're aggressively growing adoption of TORC across all procedure types and physician call points. TORC continues to be the cornerstone of our interventional spine engagement strategy. While we provide comprehensive training on intra and TORC, in the third quarter, the majority of cases performed by interventionalists continue to utilize TORC. With the expanded iFEWS platform, we have a comprehensive range of solutions that provides physicians with the flexibility to choose the best option for their patients when performing SI joint fusion procedures. On the clinical front, we've completed the enrollment of 110 patients across 15 sites for Stacey. a prospective study of lateral transfixing SI joint fusion using torque when performed by interventional spine physicians. With zero reported serious adverse events, we're pleased by the early results confirming the safety of the procedure. Turning to the spinal pelvic segment, we're excited to announce that we were granted transitional pass-through, or TPT, pain and status for granted. This TPT payment status is effective January 1, 2025, and allows hospital outpatient departments and ASCs to be reimbursed for 100% of the grant technology costs they report to Medicare. This 100% grant technology cost reimbursement would be made in addition to the typical APC payment. In addition, CMS approved our request to remove CPT 22848. the physician payment for pelvic fixation from the inpatient only list. Starting in 2025, surgeons will have the flexibility to report the pelvic fixation code in a hospital outpatient setting as well and now have the facility receive the TPT payment. We believe these changes will allow us to expand the market for granite across multiple sites of service specifically as we pursue the 100,000 degenerative lumbar fusion procedures that go to the pelvis. Our recent launched Granite 9-5 is exceeding expectations and accelerating the overall adoption of Granite across deformity as well as degenerative spine procedures. Based on the demand trends in the quarter, Granite 9-5 is on pace to surpass the success we experienced with TORQ and Granite 10-5. In the third quarter of 2024, not only has procedure volume grown, we've also seen a 40% increase in the number of stacked granite cases where multiple implants per side are used compared to the first quarter for 2024. With Granite 9-5, we have an opportunity to increase physician engagement, drive more procedures per user, and increase the overall procedure ASP as stacked granite procedures grow. On the clinical front, we're enrolling patients in PAULA, a multicenter prospective study of granite. We expect to publish preliminary results in the second half of 2025. Over the next 18 months, we intend to launch a series of anatomy-specific solutions that leverage our core competencies and learnings from TORQ, granite, and TNT. These solutions will have applications across our existing markets, as well as position us to address unmet clinical needs and drive deeper engagement with our existing call points. Before I hand it over to Anshul to discuss our financials, I want to thank our incredible team members. Our success in identifying new markets, as well as building and then successfully commercializing breakthrough devices, is due to your innovative ideas and unwavering commitment to patients. We're excited about the future we can build together. With that, I'll hand the call over to Anshul.