Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SI-BONE Inc (SIBN, Financial) reported a record $40 million in worldwide revenue for Q2 2024, representing 20% growth.
- US revenue grew by 21% to $37.8 million, driven by strong demand for their solutions.
- The company added 220 active physicians in the quarter, setting a new record for active physicians.
- SI-BONE Inc (SIBN) achieved a 43% improvement in adjusted EBITDA, indicating significant progress towards profitability.
- The company expects revenue growth to accelerate in the second half of 2024, driven by continued physician growth and increased procedure volumes.
Negative Points
- Gross margin for the quarter was 79%, impacted by procedure and product mix.
- Operating expenses increased by 7% to $41.7 million, driven by higher commissions, increased commercial activity, and R&D investments.
- The company reported a net loss of $8.9 million, or $0.22 per diluted share.
- International revenue was relatively low at $2.2 million.
- There is potential risk associated with the company's ability to maintain favorable reimbursement for its products and procedures.
Q & A Highlights
Q: The dock utilization in the quarter was softer in Q2 of this year than in Q2 of last year. What dynamics are impacting this?
A: Laura Francis, CEO: We had a strong quarter with 21% US revenue growth and a 23% increase in our active physician base. The softer number might be due to seasonality, but overall, we are seeing consistent double-digit growth in active physicians and a record number of new physician trainings.
Q: The guidance implies a sharp deceleration in the back half of the year despite new products like Granite 9.5. Can you explain this?
A: Anshul Maheshwari, CFO: We don't think about the business in stack growth. Our guidance of $165 million to $167 million implies an acceleration in the second half of 2024. We expect to offset the typical Q3 sequential decline with tailwinds from new product rollouts like Granite 9.5.
Q: On the adjusted EBITDA guide positive for the fourth quarter, how should investors think about breakeven next year?
A: Anshul Maheshwari, CFO: We expect annual revenue growth to continue to exceed OpEx growth going forward. We will make targeted investments in sales force expansion and R&D but expect significant leverage on the OpEx side, allowing us to sustain adjusted EBITDA positive on an annual basis.
Q: Can you provide more color on the new trauma product expected in Q4?
A: Laura Francis, CEO: The new trauma product is designed to fit the workflow of trauma surgeons. We are attracting interest from regional distributors for agency partnerships. This portfolio expansion, combined with our hybrid commercial model, will help us capture the trauma opportunity and contribute to long-term revenue growth.
Q: How do you plan to address the trauma doctors with the new product launches?
A: Laura Francis, CEO: We are using a hybrid commercial model with our direct sales force working closely with third-party agents who specialize in trauma. This approach will help us drive growth in the trauma market.
Q: Can you provide more details on the Granite 9.5 launch and its impact on the second half guidance?
A: Laura Francis, CEO: Granite 9.5 is targeting both deformity and degenerative spine procedures. It has been well-received and is expected to drive deeper engagement and more procedures per physician. Anshul Maheshwari, CFO: Granite 9.5 opens up the S1 opportunity in primary and revision cases, which is baked into our guidance.
Q: How does the appointment of Thomas West help shape your interventional strategy?
A: Laura Francis, CEO: Tom's experience with Nalu Medical will help us strategize around the interventional market. We are targeting the first 1,000 interventionalists for the lateral TORQ transfixing procedure and see opportunities to expand to the additional 3,500 interventionalists over time.
Q: Do you have interventionalists in the 1,150 active physicians today?
A: Laura Francis, CEO: Yes, we are seeing adoption by interventionalists as well as spine surgeons.
Q: Will the new trauma product require real-world data, or do you expect quick adoption?
A: Laura Francis, CEO: We have been working in the trauma market since launching TORQ in 2021 and have data to share with surgeons. We expect quick adoption given the existing success with TORQ.
Q: What are the rough timelines for the next milestones in the STACI study?
A: Laura Francis, CEO: We have completed enrollment in the STACI study and plan to have a publication out by early 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
