Vericel Corporation

Ladies and gentlemen, thank you for standing by. Welcome to VeriCell's second quarter 2026 conference call. At this time, all participants are in a listen-only mode. I would also like to remind you that this call is being recorded for replay. I will now turn the conference call over to Eric Burns, VeriCell's Vice President of Finance, Business Intelligence, and Investor Relations.

Thank you, Operator, and good morning, everyone. Joining me on today's call are VeriCell's President and Chief Executive Officer, Nick Colangelo, and our Chief Financial Officer, Joe Amara. Before we begin, I would like to remind you that the discussions during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially from expectations are discussed more fully in the company's most recent filings with the SEC. Also, the discussions today will include certain non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in today's press release as an exhibit to Verasol's current report on Form 8-K filed today with the SEC. A short presentation with highlights from today's call is also available in the investor relations section of our website. I will now turn the call over to Nick.

Thank you, Eric, and good morning, everyone. The company delivered excellent financial and commercial results across the business in the second quarter and achieved a number of key business objectives that positioned the company to continue to generate strong revenue, profit, and cash flow growth in 2026 and beyond. The company generated record second quarter total revenue of more than $77 million, which increased 22% over last year, and exceeded our guidance for the quarter, driven by substantial growth for both Macy and the BurnCare business. This strong revenue performance drove another quarter of significant profit and cash flow growth as the company generated gap net income for the quarter and over $14 million of free cash flow, ending the quarter with over $227 million in cash and investments. These results continued a very strong performance to date in 2026, as the company generated total revenue growth of 26%, adjusted EBITDA growth of 47%, and nearly $30 million of free cash flow in the first half of the year. Based on these results and the significant momentum across the business, we're raising our full year revenue guidance to $330 to $340 million, which represents total revenue growth of more than 20% at the midpoint of our guidance range. Macy had another great quarter as double digit volume growth drove record second quarter revenue of more than $65 million which exceeded our guidance for the quarter and represented 23% growth versus the prior year. Macy's trailing four quarter revenue growth of 23% is significantly higher than its 19% growth in the prior four quarters as we continue to execute on our strategic initiatives to deliver sustained high revenue growth for Macy. To that end, we're leveraging our larger Macy sales force to drive growth in new Macy users and deeper penetration within our current Macy surgeon practices. We continue to leverage Macy Arthro to expand overall Macy utilization, and our medical team has made significant progress in generating clinical data demonstrating the potential for improved patient outcomes with the less invasive Macy-Arthro procedure. Our commercial excellence initiatives, together with strong execution from our Macy sales team, led to double digit biopsy and implant growth, record second quarter biopsies, implants, and biopsy and implanting surgeons, as well as the second highest number of biopsies and biopsy surgeons in any quarter since launch. BurnCare's second quarter revenue increased 22% to $12 million, which was above our guidance range for the quarter and represented one of the highest burn care revenue quarters to date. EpiCell had another strong quarter and Nexabrid had its highest quarter of revenue, ordering centers, and total hospital unit sales to date, continuing the trend of strong overall burn care results over the past four quarters. In terms of our longer-term growth initiatives, we remain on track to relaunch Macy outside the United States and submitted a Macy marketing authorization application in the UK in the second quarter, which if approved, would enable the company to potentially launch Macy in the UK in 2027. We also continue to activate sites in the Macy ankle mascot study and began enrolling patients in the study in the second quarter. Finally, as part of the company's capital allocation strategy to maximize long-term shareholder value, this morning we announced that our board of directors has authorized a $200 million share repurchase program. Our financial outperformance, robust cash generation, and strong balance sheet position the company to continue to invest in our near and long-term growth initiatives across all areas of our business and to opportunistically return capital to shareholders. Our significant ongoing investments, together with the launch of the company's first share repurchase program, reflect our confidence in the sustained growth trajectory for the company in the years ahead. I'll now turn the call over to Joe to discuss our second quarter results and our updated 2026 guidance in more detail.

Thanks, Nick, and good morning, everyone. The company had a very strong second quarter across all key financial measures, including top-line revenue, Bottom line profitability and cash generation metrics. Total revenue increased 22% to $77.5 million, which was significantly above our guidance range for the quarter, driven by strength in both commercial franchises. Macy's momentum continued with double digit volume growth and record second quarter revenue of $65.5 million, representing 23% growth versus the prior year and also March the fifth consecutive quarter with Macy growth of 20% or more. Burn care revenue was approximately 12 million with epi-cell revenue of 10.4 million. And of note, epi-cell revenue of more than 21 million in the first half of the year represents the second highest epi-cell revenue total over a six-month period since launch. Next-grade revenue of more than 1.5 million was the highest quarterly revenue since launch, which increased more than 30% versus both the prior year and the prior quarter as next regularization continues to increase. The company also delivered strong profitability metrics for the quarter with gross margin of 73% and adjusted EBITDA margin of 19%, both of which were above our guidance for the quarter. In addition, The company delivered GAAP net income for the first time in a second quarter with net income of $2.2 million. Finally, the company generated operating cash flow of $16.2 million and free cash flow of $14.3 million, representing the fourth consecutive quarter with free cash flow of $12 million or more. We ended the quarter with approximately $227 million in cash and investments. An increase of over 60 million compared to the end of the second quarter last year as the inflection and cash generation continues following the completion of our new facility. With these strong second quarter results, the company has generated significant top line, bottom line, and cash generation growth across the business throughout the first half of 2026. And over the last four quarters, the company has generated total revenue growth of 23% adjusted EBITDA growth of nearly 40% and $62 million in free cash flow as we continue to elevate the company's top tier financial profile. Turning to our financial guidance, based on the company's strong results across the business, we are increasing our full year total revenue guidance range to $330 to $340 million for the year, which represents total company revenue growth of approximately 19% to 23%. After another very strong quarter for Macy, we are raising full-year Macy revenue guidance to $284 to $290 million compared to the prior guidance of $282 to $288 million. We are also raising full-year Bernker revenue guidance to $46 to $50 million compared to our prior guidance of $44 to $48 million. For the third quarter, we expect total revenue of approximately $76.5 The 78.5 million with no change to our third quarter or second half revenue guidance framework for either franchise compared to prior guidance. At the midpoint of our guidance, this implies approximately 65.5 million of Macy revenue in the third quarter with high teens growth versus the prior year. For burn care, the midpoint of our third quarter guidance assumes approximately 12 million of total burn care revenue which maintains our core commercial burn care guidance framework and includes approximately 3 million in barter procurement revenue. Moving down the P&L for the full year, we continue to expect gross margin of approximately 75% and adjusted EBITDA margin of approximately 27%. The third quarter, we expect gross margin of approximately 71 to 72% and adjusted EBITDA margin of approximately 21 to 22%. Finally, we are pleased to announce our $200 million share repurchase program. This program, which reflects the company's significant cash generation and overall financial strength, enables the company to continue to invest in both near-term and long-term growth initiatives and to opportunistically return capital to shareholders as part of our capital allocation strategy to maximize long-term shareholder value. Overall, 2026 is set up to be another strong year for the company. Our recent financial results continue to demonstrate the company's unique combination of sustained high revenue growth, profitability and cash generation. As we look ahead, we believe that durable growth of our portfolio positions the company to sustain strong top line growth and supports our midterm revenue and profitability targets with significant cash generation. This concludes our prepared remarks. We will now open the call to your questions.

Hi, thanks for taking the questions and congrats on a great quarter here. I guess maybe just to start, you know, the Macy acceleration, especially when you look at it on a two-year stack, I mean, it's notable. And thank you for providing the last 12-month look back trend because you can see the step up there. So I guess maybe you could just go into a little bit of what's driving this step function increase. Is it Macy Arthrow? and something in the underlying market. We would love to just hear how durable and if you could also address price and volume in that.

Thank you. Hey, Rich, it's Nick and I'll start and appreciate the comments. As we've talked about over the past several quarters, I'd say about this time last year, we were talking about being very proud to be on a path to a quarter billion in revenues and similar for Macy and you know what we need to do to make sure we're we remain on track to reach half a billion you know by the end of this decade which has really been our focus and so I would say at this point it's really a combination of the fact that you know we increased our Macy sales force we obviously launched Macy Arthro which has had an impact really spent a lot of time on the commercial excellence initiatives that have really elevated the execution of our Macy's commercial team, and really doing the same thing on the burn care side. So I would say we're obviously seeing those results now. As I mentioned in my prepared remarks, our trailing 12-month growth rate is 23% versus 19% before that. So that's exactly what we had wanted and expected to see out of all the initiatives that we've talked about over the past several quarters.

Yeah, and just good morning, Rich. This is Joe. I mean, just to add from a kind of price-volume perspective, you know, I think it's a pretty similar kind of mix that we saw, you know, over the last few quarters and, you know, very similar to Q1 where we saw strong biopsy growth, which of course is important. That's the key contributor to the pipeline. You know, that translated into another quarter of strong double-digit implant growth, you know, similar to Q1, and strong pricing as well. So you kind of net that together and, you know, another strong quarter, and as Nick said, really I think the execution from a team perspective has really elevated in both franchises, but obviously the Macy results have been strong.

That's helpful. If I could just tag one on, on pricing durability. I mean, it's clearly part of the growth algorithm and it looks like it's been sustainable for quite some time. You know, about high single digit to low double digit is kind of what it feels like your pricing in any given year is contributing on Macy. What can you tell us as to why that's durable or what gives you confidence in the sustainability of that going forward?

Yeah, Rich. So, you know, we talked a lot about this on the last call that, you know, Macy's in a pretty unique position. You know, it's regulated as a combination device, biologic advanced cell therapy by the FDA. And when you think about the rigorous pricing research that we regularly do and kind of how payers and hospital administrators think about the product, We're really well positioned. So compared to other cell and gene therapies, as we talked about, Macy's price is significantly lower than other cell therapies like CAR T therapies that can be in the half million dollar range or gene therapies in the million plus range. And so on a unit basis, it's you know significantly lower than those similar technologies and when you look at the overall spend in any given category whether it's those kinds of advanced cell or gene therapies which are you know in the billions of dollars or even in our space of total knee, total hip, total shoulder replacements you know the overall spend to any particular payer or system is very low compared to other areas in our space. And so I think for that reason, we remain well positioned. And as we talked about in our most recent market research, it suggested that those kind of similar price increases that we have been taking really over the past decade since we launched the product, we would expect those to continue over the next several years. So we've been very kind of clear that Macy is clearly a volume and price growth story for the foreseeable future.

Thank you and congrats.

Thanks, Rich.

Thank you. We'll take our next questions from Josh Jennings of TD Callen.

Hi, good morning, everyone, and thanks for taking the question. Congrats on a good quarter. I just wanted to expand on guidance quickly. Certainly appreciate the two-year stack perspective, but just looking at this year in isolation, you had a really strong 1H, but 2H implies a little bit of a slowdown across the board. Wanted to hear your comments there, and just had a quick follow-up.

Yeah, so good morning. This is Joe. I'll take that one. So yeah, I'd say from you know just a quick guidance update you know I think pretty straightforward kind of similar to what we talked through last quarter so you know obviously a strong second quarter you know beat by more than two million in each franchise and on a full year basis you know essentially incorporating that beat in total and in each franchise so that's that's the full year update and I think to your question you know I think one thing we want to maintain is you know I think we've had a good guidance framework that's worked well for the company and you know we want to keep that in place for the remainder of the year so I'd say we're just trying to be prudent. Our assumptions in the second half have not changed or our guidance commentary rather. So whether you look at Q3 or Q4 in the Macy's side, you're kind of in that high teens growth rate is kind of our guidance framework assumption. Similar on the burn care side where I think last quarter we pointed to essentially 12 million per quarter is kind of the right way to think about the back half, and that has not changed. So, you know, we pointed to $12 million in the third quarter, which is kind of $9 million corn and $3 million BARDA, you know, a similar assumption for the fourth quarter. And then just back to Macy and just maybe the framework, you know, we talked about in terms of Q3, you know, we have a revenue range out there, and obviously there's some different scenarios, but, you know, probably a good midpoint, again, is just to keep that high teens Assumption on Macy, you know, call it around $65 million or so. And then again, Burn Care at around $12 million. So I think that's consistent. And then, you know, I would say kind of to your question, you know, obviously, you know, the last, you know, six months to start the year and really going back to last year, we've had a number of strong quarters. You know, and the reality is if the team continues to execute well from a Macy perspective, we have a strong pool of biopsies, the indicators are strong, you know, we think we should be set up, you know, very well in the second half, certainly to, you know, meet our guidance and hopefully to outperform it. So that's certainly the goal. Our internal expectations remain higher. And I would say somewhat similar on the burn care side, which is, you know, that's obviously a more difficult market and franchise to predict, but You know, we have seen, you know, a few quarters now of some consistent results on the burn care side that have been a nice improvement. So, you know, just generally, I would say to your question on kind of the decel in the second half, I mean, that's more of a guidance framework assumption, which I think is, you know, the right place to be and to be prudent on that. But again, our internal expectations remain higher and clearly we're running at higher levels now.

Excellent. Thank you. And just to clarify, it's John on for Josh. And then just moving to profitability, adjusted EBITDA, nice improvement there, strong quarter. Moving also to kind of an LRP question, you are aiming for high 30s adjusted EBITDA margin by 2029. What does that ramp look like, given that implies considerable expansion over the next couple of years, particularly in the framework of current year guidance?

Yeah, so, I mean, in terms of our midterm, you know, targets generally, you know, I feel like we're on track, whether it's revenue or the margin targets. You know, I think what you're seeing, just as a reminder, in this calendar year is, you know, we're kind of adding a number of these 12 months, whether it's the Salesforce expansion, kind of the ramp up of the ankle trial, some of our ex-US spend, et cetera, that's you know certainly contributing and then of course on the gross margin side which impacts EBITDA as well kind of adding the cost for a new facility so this is a bit of a kind of transition year on the P&L where we still expect some modest expansion and to expand a little bit in H1 from a margin perspective but I would generally say we would expect once we kind of get through 26 and into 27 will probably get into those more significant year-over-year increases on the adjusted EBITDA side and start to see that leverage flow through. And then, again, when you get toward the end of the decade, you probably see things like the ankle trial will start to wind down, for example. So that will help as we get there as well.

Excellent. Thank you very much. And congrats again.

Thank you.

Thank you. We'll take our next question from Ryan Zimmerman of BTIG.

Hey, guys. Can you hear me okay?

Yeah, good morning, Ryan.

Good morning. Congrats on the quarter. You know, this is the first share repurchase authorization, you know, in the company's history. I'm wondering, you know, Nick and Joe, how do you think about the use of that? I mean, you know, is this something that you're using to, you know, offset maybe stock-based comp? Is it to, you know, hold the share price at a certain level? And just how do you think about it in the context of, like, your cash transactions? between you know that and then growth initiatives or M&A and you know kind of because because if I think about kind of getting the company's history I mean you guys have been on the hunt for for additional assets for some time and and you know just try and understand what that means in in the purview of in that context I guess.

Hey Ryan it's Nick thanks for the question you know I would just say that Our capital allocation priorities remain the same. It's always about, you know, funding internal growth opportunities. And as we've talked about, you know, pretty consistently, our new facility where we made, you know, about $100 million investment, you know, and our cash still increased while we were doing that. was really the biggest CapEx investment we were going to need to make to achieve our growth objectives. And with that behind us, you can see sort of the inflection in cash generation, free cash flow, et cetera, which will only ramp up as we move forward. So, you know, our internal funding of growth opportunities really falls within our operating plan. We always aggressively invest for growth, whether it's a Salesforce expansion, expanding outside the U.S., doing the Macy Ankle study, commercial excellence initiatives across the board, and that's not going to change. Secondly, you know, we obviously have nearly a quarter billion dollars in cash now, and again, that's going to continue to ramp. We continue to look for, you know, M&A opportunities, additional product opportunities. We obviously built the company on business development transactions, so that's kind of in our core DNA, and that won't change either. But again, with kind of the The performance of the business, our strong balance sheet, doing a share repurchase program where we can opportunistically return capital to investors. We can do both. So it doesn't change our overall capital allocation strategy, and it's just a reflection of the confidence that we have in our continued long-term growth.

Fair enough. And there's a couple of questions I have. I'll try and keep it to just one. When you think about your push into Europe, I'm curious if you can talk about what you think or what reimbursement looks like, how you think about pricing, how you think about the impact to margins as we potentially have a UK launch into 2027. Thanks.

As we talked about on our last call, the UK opportunity is a great beachhead for us. Macy's got a lot of brand recognition, surgeon advocacy in Europe and particularly in the UK. Those were the surgeons. Macy was developed in Europe. It was on the market in Europe. Those surgeons actually came over and trained our US surgeons when we launched the product back in 2017. So very strong advocacy and desire to have Macy back in Europe and in the UK in particular. From a commercial execution standpoint, it's a very concentrated market there with a dozen or so centers of excellence where patients in the UK and the national health system will be treated for cartilage injury. so that's great and then there was you know the reimbursement and pricing back in the late teens there actually was a review of you know ACI technologies and a positive opinion from NICE that You know, had pricing that was certainly lower than the US, but certainly acceptable for us. You know, we're going back. That's the next step. As we mentioned in our press release this morning, we submitted our marketing authorization application to the UK in the second quarter. So, you know, we remain on track for an approval, hopefully, you know, by the end of the year and in a launch into next year. Part of that whole process is a submission for a single technology assessment by NICE. So we'll go through that process again. And, you know, we expect, given the prior history and then the additional long term data we have for Macy and some other changes sort of in that market, That reimbursement will be at a range that, you know, will be sort of attractive to the company. That's important because other European countries will use that as a reference price, Canada, etc. So, you know, obviously, we wouldn't be doing this if we didn't think we would get pricing that would make sense for us outside the U.S. Yeah, and Ryan, just to add on your kind of

P&L question you know I would say generally I mean this is going to fit in well with our margin profile we can use some of our capacity and at times excess capacity here in Burlington so you know expect that to fit in well with our margin profile and then you know I think particularly starting in the UK I mean as we talked about it's a very concentrated market so it's not going to be a huge you know kind of uptake in terms of kind of FTEs or to kind of get into that market from a on a market model perspective or go-to-market perspective, I should say. So not huge investments on the sales and marketing side. So we think this will fit in well on the margin side in general for the company. And obviously, hopefully, it can scale over time.

Got it. Thank you, guys.

Thank you.

Thank you. We'll take our next question from Mike Crackey of Lyric Partners.

Hey, how's it going, everyone? Thanks for taking our questions and congrats on the really strong quarter. Maybe just one from my side, but can you provide any additional color on to what extent you're seeing Macy-Arthro adoption within Patella and some of the larger defects versus seemingly driving more penetration in smaller condyles and other defects? How market expanding has Macy-Arthro been now that you're a little further out from launch?

Yeah, hey, Mike, it's Nick. So first of all, you know, as you know, the the Macy Arthro instruments are designed to treat smaller femoral condyle defects, two to four square centimeter defects, and that's obviously where they are being used. as we've talked about on prior calls you know we have seen use outside the femoral condyle so you know in the trochlea in particular which was a nice sort of upside and then in even some patella cases as well but again they tend to be in the smaller defects and so you know I'd say overall you know we talked last call about the fact that 2025 was really a year around building the foundation of trained surgeons which we outperformed on you know we continue to train those surgeons but we're really focused on having surgeons now move on to macy arthro cases because we've seen that while trained surgeons you know have higher activity levels than pre-arthro those that are actually doing macy arthro cases actually outperform all of them have higher conversion rates and so on so you know those trends continue as we move into into 2026 and you know we expect that to continue so I think it's again intertwined with all the other commercial initiatives that we have going on that you know have really elevated the execution and you know now we're excited to see that publications are starting to flow so you know even just last week there was a OUS long-term Macy outcomes publication for arthroscopically administered Macy, you know, with an average kind of timeline of about 13 years and The data there was excellent. Obviously, they weren't using the Macy-Arthro instruments, but, you know, great long-term outcomes and really sort of the highest patient satisfaction results we've seen in any of the, you know, 10-year plus data that was out there with Macy. So really great outcomes there. And then here in the US, as we mentioned previously, the first publication was accepted, hasn't been published yet, but we expect that to show those shorter term positive outcomes that we talked about previously around return to full weight bearing on a faster basis. Range of Motion, etc., less post-operative pain. And so, you know, we expect that that kind of clinical data will also support increased uptake with Macy-Arthro as well.

Understood. Super helpful. And we just want a quick follow up, but you talked about the Salesforce expansion. To what degree are you already seeing, you know, kind of full utilization and those new reps having ramped and contributing already versus, you know, that's still something that you might see more upside from in the back half or 2027?

yeah that's a great question so you know obviously unlike our expansions back in sort of the late teens or 2020 where we were kind of filling in some white spaces here you know there's established Macy business across the country and so the new reps come in and you know they are contributing immediately and we talked about the fact that you know we saw some of the you know highest biopsy growth rates in the first quarter coming out of those new territories you know and they've continued to perform from that perspective in Q2 and you know implant growth accelerating as well and interestingly as we look at sort of you know more recent ads to our sales force over the past couple of years You really see an inflection in the growth in years two and three. That's when they really hit their stride and typically outperform some of the more established territories. And so, yeah, that's a great point that we're excited about. This is not just a first half 2026 phenomenon. This is something that we should see through the remainder of 2026. into 27 and maybe beyond as well. So yeah, we're really pleased with the execution to date and certainly it's helping fuel the growth we've seen.

Awesome. Super helpful. Thanks Nick and congrats again.

Thank you.

Thank you. We'll take our next question from Caitlin Roberts of Canaccord Genuity.

Hi, congrats on a great quarter and thanks for taking the questions. Would love to touch on Arthro a little bit more. I think the last number of surgeons you mentioned that were trained on Arthro was about a thousand. I mean, just any color you talked about switching to the focusing on cases completed now, any color on how many of your surgeon users have completed an Arthro case at this point and any update on the next gen instruments and timeline for those launching?

Yeah, thanks, Caitlin. Good to talk to you. You know, I think on the Macy-Arthro surgeon users, we haven't really sort of kind of tracked that or publicly disclosed that. I mean, what we're really focused on is increasing those Macy-Arthro cases, as we talked about, you know, for the reasons we talked about, where they have higher growth rates, conversion, etc., you know it's certainly not if a surgeon's trained on Macy obviously you know they're very interested in using Macy Arthro then they have to find a patient who's got you know a defect that's amenable to using Arthro and the patient then has to move forward so you know this is sort of a long sales cycle but what we do see in those trained surgeons you know regardless of when they do their first case is that they're definitely treating more smaller implants and so you know that's kind of what we've been looking for to grow that share in this in the largest part of the market and again we're happy with the progress as you know with Macy these things sort of play out over longer periods of time just because this sort of sales cycle is elongated for Macy so everything remains on track that we'd want to see and you know a lot of a lot of excitement remains In terms of sort of next generation, you know, that's something we're continually working with surgeons on. Our goal is always to continue to reduce time for Macy-Arthur cases to simplify that. And so we work with, you know, a number of surgeons in labs to develop those instruments. And I'd say like the first round, you know once we have a design freeze which you know will happen you know here in the next couple of quarters call it you know it's usually another year or so after that to get through the whole validation and approval process so you know I'd say probably you know maybe 2028 would be a good time frame to think about next sets of instruments coming out.

Awesome and Just turning to, you know, pricing again, we've talked a lot about, you know, the Macy price increases. But what about Epicil and Nexavir? How much is pricing a part of the equation there?

Yeah, I mean, so, I mean, generally, I think we've talked about in the past, and it's probably, you know, somewhat similar. It can vary because, you know, it can look a little bit different across you know different kind of parts of the channels but you know generally I would say you know EpiCell is we've had a strong year very strong year from a volume perspective that is you know clearly what's driving our kind of outsized results this year but you know we do typically take kind of you know something similar in the Macy's side in terms of you know price increases you know on the EpiCell side and you know we actually I haven't done a whole lot on the Nexabrid side, but I think we just took a modest, I think our first price increase, you know, around mid-year this year. So that's, you know, it's kind of a modest piece on the Nexabrid, but, you know, pretty similar in terms of, I would say, the framework around something, you know, typically mid-single digits, you know, could be a little bit higher depending on kind of the channel.

Great. Thanks so much.

Thank you.

Thank you. We'll take our next question from Mason Carrico, Stevenson.

Hey, guys. Thanks for taking the questions here. Are you willing to share what percentage of the new-to-Macey surgeon cohort has completed a Macey procedure at this point? I think you guys have said that that group of surgeons maybe made up a third of the 1,000 trained that you highlighted earlier this year. And then among those that have, are you seeing signs that they're increasing their use of Macy in their practice in general? Have they kind of been more wonder done? Just any insight there?

yeah so Mason you know we really haven't gone back and continued to parse out sort of you know kind of how many of those trained in the different segments have actually sort of moved through the funnel to date for the reasons that I I just mentioned but I will say that again once we end up you know having Those surgeons sort of trained. We do see increases in biopsies and so on. And ultimately, you know, one would expect that those turn into implants over time. So those are kind of the early indicators that we look for out of all three of the segments for those the the Macy trained surgeons so I'd say kind of equivalent behavior across the board and we actually don't spend a lot of time at this point trying to parse out sort of differential rates you know out of different buckets um so and we you know did note that those trained surgeons again we're kind of at a critical mass where as I mentioned on the last call we'd expect over time that, you know, every Macy surgeon is going to be trained on Macy arthro. And, you know, we're just kind of seeing similar behavior across the board there.

Got it. I'll just keep it to one. Thanks.

Thanks, Mason.

Once again, if you'd like to ask a question, please press star one on your phone. We'll take our next question from Jeffrey Cohen.

Good morning, thanks for taking our questions. So just a couple, I did want to follow up on sales organization and back half and potential expansion. Could you talk about back half? Do you plan to add commercial folks, at least domestically, and then maybe talk about what preparations are being made in the UK from a commercial standpoint prior to launch?

Yeah, hey Jeff, it's Nick. you know I guess I'll address it for both you know commercial businesses you know on the burn care side over the past couple years we've kind of expanded pretty meaningfully to you know about 17 territories and burn care support specialists and you know at this point you know we don't have any plans for sort of a wholesale revamp of that obviously they're executing well and performing well and so you know and on the Macy's side obviously we just completed early this year, sort of the bigger Salesforce expansion. So I think we're pretty good. Don't have any plans for the second half of the year on either of those counts. And I would say, you know, as we go forward, it's kind of probably going to be more about opportunistically increasing, you know, or adding reps where necessary in different parts of the country as opposed to, you know, any kind of wholesale increase again over the next, call it, year or two. Got it, that's helpful. Oh, sorry, just on the UK front, you mentioned, you know, that would be something, you know, hopefully we remain with the submission and hopefully we get an approval by early next year, can launch in 2027. As Joe mentioned, you know, given that there's really 12 or 13 centers of excellence that, you know, perform these cartilage, restorative cartilage, Repair Procedures in the UK. We're not going to need more than really a handful of commercial folks over there at any point. So, you know, that will probably happen late this year, early next year.

Got it. And then could you talk about Nextabrid a little more as far as what you're seeing on utilization and sites and maybe talk about overlap or not with some of the up-to-sell accounts as far as existing and new customers?

Yeah, well, I think we're starting to feel the momentum build for next spread. Obviously, we said it was a record revenue. ordering center you know hospital unit sales quarter for us and that we're you know we're essentially up to about 80 ordering centers cumulatively over time since launch so feeling good about sort of the consistency of orders coming through and so on so you know feels like that is kind of again building momentum and we're excited about that especially in combination with sort of the BARDA award which remains on track as Joe mentioned it's part of our guidance for the third quarter and we're certainly well positioned to begin you know that procurement process pretty early in this quarter. Perfect great quarter thanks for picking your questions.

Okay thank you. It appears there are no further questions at this time. I'll turn the conference back to our speakers for any additional or closing remarks.

OK, well, thank you. Just want to say thanks again for joining us this morning. The company had a great second quarter and first half of the year, and we look forward to providing further updates on our performance on our next call. So thanks again and have a great day.

This concludes today's call. Thank you for your participation.

You may now disconnect.