Shoulder Innovations NYSE: SI reported second-quarter net revenue of $17.2 million, up 56% from $11 million a year earlier, as the company added surgeons, expanded use among existing customers and advanced several product launches. The company raised its full-year 2026 revenue outlook to $67 million to $69 million, from a prior range of $65 million to $68 million.
Chief Executive Officer Rob Ball said the updated guidance represents growth of 42% to 46% over 2025. Management said the outlook incorporates typical orthopedic seasonality, including lower sequential procedure volumes in the third quarter and a second-half mix shift that can affect average selling prices.
Surgeon Adds and Procedure Volume Drive Growth
Ball said Shoulder Innovations added more new customers in the second quarter than it did in the first quarter, following a first-quarter pace of additions that was more than double the prior-year rate. The company’s commercial organization targets approximately 1,800 high-volume U.S. surgeon specialists.
Total implant volume among the company’s core, contender and prospect customers increased about 50% year over year to 2,238 units in the second quarter. Ball said most of that growth came from core surgeons, both in the number of physicians using the company’s products and the number of procedures those surgeons performed.
Every company territory grew year over year during the quarter, with a majority posting growth above 80%, according to Ball. Shoulder Innovations also expanded its commercial presence at two hospital systems, gaining full access at both centers.
The company held more than 90 surgeon engagement events year to date, reaching hundreds of surgeons. Ball said the company’s April national symposium in Napa was its largest event to date by surgeon attendance and was followed by increased procedure volumes among attendees.
During the question-and-answer session, Ball said the company believes a “vast majority” of its growth is coming from share gains against larger incumbent competitors, though it is also capturing some market growth as it expands its presence in centers with fellowship programs.
Margins Improve While Product Investment Continues
Second-quarter gross margin rose to 78.3%, compared with 76.2% a year earlier. Chief Financial Officer Jeff Points attributed the improvement to strong average selling prices and negotiated cost-reduction programs across product lines.
Selling, general and administrative expense increased to $20.1 million from $12.8 million in the prior-year quarter, driven primarily by commercial headcount additions, higher variable selling expense and public-company costs. Points said that excluding public-company costs, the company generated operating leverage in SG&A compared with the prior year.
Research and development expense increased to $3.4 million from $1.4 million, reflecting investment in new product development, including the company’s robotic platform. Net loss narrowed to $10.2 million from $19.2 million a year earlier, while adjusted EBITDA loss narrowed to $8 million from $18.1 million. Points said the year-earlier losses included a significant charge related to changes in the fair value of preferred stock, warrant liabilities and a Series E purchase option.
Cash, cash equivalents and marketable securities totaled $99 million as of June 30. The company expects cash burn to improve in the second half compared with the first half after it increased inventory and asset purchases during the first two quarters.
Shoulder Innovations also closed two debt facilities with Stifel Venture Banking totaling up to $50 million, including a funded term loan used to refinance its existing credit facility and an undrawn line of credit. Points said the company expects to file a shelf registration statement on Form S-3 but has no imminent plans for a primary equity offering.
Pipeline Includes Robotics, Software and New Implants
The company continued commercial launches of the I135 RFX humeral stem for more complex fractures, the N22 Glenosphere for patients with metal hypersensitivity, and a titanium plasma spray reverse base plate. Ball said all three products contributed to higher average selling prices and represented a growing share of procedures year to date.
Management is also updating its ProVoyance enabling technology platform and developing a shoulder-specific micro robotic system, called InSet NEO. The company plans to submit InSet NEO to the FDA in the first half of 2027 and expects to begin a robotic training program in early 2027.
Ball said the company is not yet disclosing its commercial strategy or pricing structure for the robotic platform. However, he said Shoulder Innovations believes its portable platform could support different economic arrangements with ambulatory surgery centers and hospitals, including pricing through implants, capital purchases or other structures.
Additional pipeline milestones include:
- A limited third-quarter availability of the InSet Clutch guide system for anatomic and reverse glenoid procedures.
- A planned 2027 FDA submission for InSet1, a patient-matched, additively manufactured solution for complex reverse procedures.
- A limited user release in the third quarter for subscapularis-sparing instrumentation.
- Initial surgical cases for the next-generation InSet GO anatomic glenoid implant in the fourth quarter. Ball said the product could save up to 10 minutes per procedure.
The company also announced an exclusive collaboration with an additive manufacturing device provider for severe deformity and complex revision cases, as well as a relationship with a soft-tissue device manufacturer. Management expects to begin commercializing certain soft-tissue devices before year-end but does not expect the partnership to contribute material revenue in 2026.
Looking ahead, Points said gross margins are expected to remain at similar levels for the rest of 2026, subject to product mix and average selling price variation. The company has also filed a separate FDA 510(k) related to additive manufacturing capabilities that could reduce costs on certain products by up to 30% beginning sometime in 2027.
About Shoulder Innovations (NYSE:SI)
Shoulder Innovations NYSE: SI is a medical device company focused on the design, development and commercialization of shoulder implant systems and related surgical instruments for orthopedic surgery. The company’s product portfolio includes modular shoulder prostheses, humeral and glenoid components, and instrumentation kits designed to facilitate both primary and revision shoulder arthroplasty procedures. Emphasizing a patient-centric approach, Shoulder Innovations works to offer implant solutions that aim to restore mobility and reduce post-operative complications.
In addition to its core implant offerings, Shoulder Innovations provides comprehensive clinical support and training programs for surgeons and operating room teams.
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