SI-BONE, Inc.

Good afternoon, and welcome to CYBONE's first quarter 2025 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, Vice President, FP&A, and Investor Relations at CYBONE for a few introductory comments. Please go ahead.

Earlier today, SI Bone released financial results for the quarter ended March 31st, 2025. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management's remarks today may 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. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, such as our most recent Form 10-K, and actual results might differ materially from any forward-looking statements that we make today. Accordingly, you should not place undue reliance on these statements. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except as required by law. 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 positive 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 prior year. With that, I'll turn the call over to Laura.

Thanks, Akev. Good afternoon, and thank you for joining us. I am thrilled with the start to 2025, marked by another strong quarter of outstanding revenue growth, record position base, expanding growth margins, and strong operating leverage. Our results confirm that our industry-leading innovative platform targeted nearly half a million annual procedures is continuing to gain momentum. Our worldwide revenue for the quarter reached $47.3 million, representing approximately 25% growth. This impressive top-line growth enabled us to deliver positive adjusted EBITDA in the quarter while continuing to make investments in R&D and commercial infrastructure. In the U.S., our revenue was $44.8 million, reflecting approximately 27% growth and underscoring the durable tailwinds building in the business. We're experiencing broad-based demand for our existing technologies and rapid adoption of our new solutions launched last year. With an active pipeline of novel technologies under development, we believe our procedure volume growth will be amplified as we launch these new solutions over the next 12 to 18 months. Our innovative platform is driving deeper engagement and market penetration as we add physicians at a record pace. Additionally, a growing number of physicians are performing multiple types of procedures, driving end user density. These are both positive leading indicators for demand. Our focus on differentiated solutions and clinical evidence continues to garner favorable reimbursement, including exclusive commercial reimbursement, a transitional pass-through payment, and new technology add-on payments. The favorable reimbursement backdrop has solidified our leadership and ensured patients have access to our unique technologies. With industry-leading gross margins, scalable commercial infrastructure, and small capex footprint, our business model is designed to rapidly scale profitability and generate free cash flow. Our resilient business trends support our confidence that we are positioned to consistently deliver strong results over the long term. Now, let me provide an update on our four key priorities, innovation, engagement, commercial execution, and operational excellence. Beginning with innovation, diversifying our platform with the addition of unique yet complementary technologies has been a key tenet of our growth. This strategy has allowed us to expand our target modalities broaden our physician footprint, and develop multiple revenue streams. Over the last three years, we've increased our total addressable market to over $3.5 billion and delivered 25% cumulative procedure volume growth. Now, let me dive deeper into our target markets. Starting with SI joint dysfunction, we built on the success of iFuse 3D with the introduction of iFuse Torque and, more recently, iFuse Intra. The comprehensive set of solutions addresses the needs of a diverse group of physicians, including orthopedic and neurospine surgeons, as well as interventional spine physicians. This portfolio and call point expansion has accelerated our procedure volume growth within the greater than $2 billion target market. While iFuse 3D historically has been the gold standard, TORC has dramatically expanded the market and has become a preferred solution for newly trained surgeons as well as interventional spine physicians. INTRA, which is reimbursed under CPT 27278, is achieving adoption in markets where the interventionalists initially prefer an allograft solution and the reimbursement is clearly defined. Our deliberate expansion with the interventionalists and decision to train them on TORC and INTRA is gaining significant traction. This specialty performed a record number of procedures with our solutions in the quarter. surpassing the previous record set in the fourth quarter of 2024. Moving to pelvic fixation, since the launch of iFuse Bedrock Granite in 2022 and the subsequent addition of iFuse Bedrock Granite 9-5 last year, we lead the industry in providing sacral pelvic solutions. Granite is designed to provide robust foundational support at the base of both long and short construct fusion procedures. The platform's ability to address a known surge in concern in multilevel spinal fusion procedures and its seamless workflow integration have led to the very rapid adoption of Granite within the nearly $1 billion target market. Since launch, Granite 9-5 has outpaced the adoption trends for Granite 10-5 or TORC. In addition to being a key driver of physician adoption, Granite 9-5 has contributed to the increase in the number of procedures utilizing four of our implants, driving higher procedure ASP. In the first quarter, the number of four-implant Granite cases grew approximately 69% compared to the prior year period. The application of Granite 9-5 and higher-risk short-construct procedures is growing within our existing surgeon base. Notably, Granite is targeting nearly 100,000 degenerative procedures ending at the sacrum each year. Starting January 1, 2025, Granite became eligible for a transitional pass-through payment, or TPT, without any device offset costs when used in the hospital outpatient setting. We believe there's a potential for the TPT to play out over time as cases involving shorter construct spinal fusions that Granite is targeting migrate to the hospital outpatient setting. Based on Medicare data, we believe that approximately 40% of these procedures could be considered for outpatient treatment. On the reimbursement front, as part of CMS's fiscal year 2026 proposal for inpatient hospital rates, reimbursement for grant multilevel procedures is proposed to increase by approximately 8%. In parallel, CMS has indicated the need for additional time to analyze the data with respect to our request for reassignment of grant procedures to a higher severity reimbursement category. Moving to pelvic trauma, We entered the pelvic trauma market with the launch of TORQ in 2021. In the fourth quarter of 2024, we launched our revolutionary second-generation trauma solution, iFuse TORQ TNT. TNT is an anatomy-specific implant designed for sacral insufficiency fractures. Based on the breakthrough device designation, CMS has proposed an NTAP for inpatient procedures of over $3,900 for TNT. effective October 1st, 2025. This represents a 20 to 30% reimbursement increase to the hospital for pelvic fracture fixation. Assuming the rule is finalized as drafted, this reimbursement advantage would continue through September 2028. We believe NTAP could expand access to TNT and serve as another tailwind for a solution that is already outperforming our internal expectations. With nearly 60,000 potential target procedures annually, representing a $300 million market opportunity, we are best positioned to capture meaningful market share over the long term. Now to provide an update on the disruptive products we expect to launch over the next 12 to 18 months. In the first quarter of 2026, we expect to launch a new SI joint fusion solution that builds on our knowledge of 3D printed titanium implants and application of IP's interest. We're excited about this new solution, which we believe will simplify workflow, provide another surgical option to physicians, and allow us to reach a wider funnel of interventional physicians who've expressed interest in adopting our procedure. With this upcoming launch, we will further extend our leadership with the most competitive solutions available to physicians. We're also making significant progress with the new product under development that we mentioned last quarter, our third-to-win breakthrough device designation from the FDA. This novel implant leverages our core technology and is targeting a more effective treatment for one of the most pressing needs in spine surgery. We expect to share more progress updates with you in the future. Next, let's move to engagements. In the first quarter, over 1,400 US physicians performed procedures using our products, surpassing the previous record we set in the fourth quarter of 2024. This translates into a 27% increase in our physician base, as we engaged an additional 300 physicians. Compared to the first quarter of 2022, we have more than doubled the number of US physicians who performed procedures using our solutions. This represents cumulative annual physician growth of around 27%. The enormous growth in our active physician base highlights our ability to successfully engage multiple cold points with our best-in-class technologies. Our product platform is designed to support physicians across multiple procedure types. Once they adopt one of our solutions, we demonstrate value and expand usage into additional procedures. TORQ is a clear example of this progression. We built on TORC engagement by introducing complementary products like Granit that address the physician's other procedural needs. This approach is contributing to strong cross-procedure adoption and deeper integration into clinical practice, as evidenced by a 43% increase in physicians performing more than one procedure type. Looking at density trends, physicians who performed a case in both the first quarter of 2025 as well as 2024, averaged nearly five procedures per physician. This was 30% higher than the overall average procedures per physician in the quarter. This shows an encouraging runway for procedure volume growth with the newly added physicians. Finally, we're thrilled with the adoption trends from surgeons we trained as residents and fellows. Year-to-date, revenue attributable from previously trained residents and fellows grew by 64%. Our strategy of engaging with fellows and residents early in their career is working. Now let me discuss our commercial execution. Our strong revenue growth reflects execution by our commercial team unmatched in the industry, bringing deep clinical expertise to every engagement. We ended the quarter with 85 U.S. territories. As we've expanded our product platform, we've evolved from a direct sales force to a hybrid model. combining territory managers and clinical support specialists with third-party agents for case support and procedure expansion. This hybrid commercial infrastructure, which has been especially effective in pelvic fixation and growing in pelvic trauma, enabled us to increase our trailing 12-month territory productivity by nearly 25% in the first quarter to approximately $2 million. Looking ahead, we expect gradual improvement in productivity as we grow our direct sales team and move toward our target of reaching 100 territories over the next 12 to 15 months. Concurrently, we'll strategically leverage third-party agents to scale our commercial reach. Before I hand it over to Anshul, I would like to thank my SI Bone colleagues for their relentless drive in developing and successfully commercializing unique solutions that have allowed us to partner with over 4,500 physicians worldwide and improve over 120,000 patients' lives. Your focus has enabled us to deliver outsized revenue growth and puts us on a path to sustained profitability. With our best-in-class commercial organization, backed by our strong innovation-driven culture, we have a huge and exciting opportunity ahead of us. Thank you. With that, I'll hand the call over to Anshul to provide an update on our fourth key priority, operational excellence. and share our first quarter results and updated guidance in more detail.