What Shoulder Innovations (SI) Said on Its Q3 Earnings Call

Key Points

• Shoulder Innovations raised its 2026 revenue outlook to $68 million–$70 million, after third-quarter revenue climbed 38% to $16.2 million. Implant volume rose 34%, supported by new surgeon additions and increased use among existing customers.
• Gross margin improved to 78.5%, and the net loss narrowed to $7.0 million from $8.7 million a year earlier. The company ended the quarter with $92.3 million in cash and said it believes its existing funds can support it to cash flow break-even.
• The company advanced several products, including launching its N-22 implant and beginning first cases with InSet Go. It is developing robotic and other technologies for planned 2027 regulatory submissions, while increasing commercial investment.

Shoulder Innovations NYSE: SI raised its full-year revenue outlook after reporting 38% growth in the third quarter, as new surgeon additions and higher use of its implants by existing customers helped offset seasonal pressure on procedures.

The shoulder implant maker reported net revenue of $16.2 million for the quarter ended September 30, up from $11.8 million a year earlier. Chief Financial Officer Jeff Points said growth was driven primarily by a 34% increase in implant systems sold, along with higher average selling prices.

The company now expects 2026 revenue of $68 million to $70 million, up from its previous forecast of $67 million to $69 million. The revised range represents growth of 44% to 48% over 2025.

Chief Executive Officer Rob Ball said procedure volumes began to improve in September after the summer slowdown, and management was encouraged by the start of the fourth quarter. He said seasonal effects among the company’s more established core surgeons were more pronounced than in the third quarter of 2025, but new customer additions supported growth.

Margins Improve as Loss Narrows

Third-quarter gross margin rose to 78.5% from 76.2% a year earlier. Points attributed the improvement to higher average selling prices and cost-reduction programs. Management expects a similar gross margin in the fourth quarter.

The company reported a net loss of $7.0 million, compared with $8.7 million a year earlier. Its adjusted EBITDA loss narrowed to $5.5 million from $7.5 million. Points said both improvements primarily reflected higher gross profit, partly offset by increased operating expenses.

Selling, general and administrative expenses rose to $17.1 million from $15.1 million, primarily because of commercial hiring and higher variable selling costs. Research and development expenses increased to $3.2 million from $1.5 million, driven in part by work on the company’s robotics platform.

Cash, equivalents and marketable securities totaled $92.3 million at quarter-end. Points said cash burn improved from the second quarter but is expected to increase moderately in the fourth quarter as the company invests in its commercial team and research and development. He reiterated management’s view that Shoulder Innovations can reach cash flow break-even with its cash on hand.

Surgeon Growth and Pricing Outlook

Ball said the company added surgeons to its customer funnel ahead of expectations for the third consecutive quarter. Implant volume among its core, contender and prospect customers rose approximately 34% year over year to 2,126 units, with core surgeons accounting for most of the growth.

The company has accelerated commercial hiring and is targeting roughly 1,800 high-volume shoulder specialists in the U.S., Ball said. Its surgeon education team has held more than 150 engagement events so far this year.

During the question-and-answer session, Ball said the company’s data set was too small to draw conclusions about the overall health of the shoulder market. He described the recent pattern as normal seasonality and said he had no data indicating either a market downturn or an upturn.

Ball also said new products could support pricing, but a growing share of procedures in ambulatory surgery centers could apply pressure because prices in those settings are modestly lower. Management welcomed the recently finalized federal reimbursement rulings, which Ball said created a constructive economic setup for outpatient shoulder replacement.

Product Pipeline Advances

Shoulder Innovations said surgeons performed the first cases using its InSet Go anatomic glenoid implant in early October. The company also received Food and Drug Administration clearance for and launched its N-22 humeral head for patients with metal hypersensitivity.

Ball said development of the InSet Neo robotic technology is progressing ahead of initial internal timelines, with an FDA submission planned for the first half of 2027. The company expects to begin a limited user release of its InSet Clutch guide system in the first quarter of 2027 and is targeting a 2027 FDA submission for InSet One, a patient-matched reverse shoulder solution.

The first patients were treated in the third quarter through the company’s collaboration with ALM Ortho on complex cases. Ball said he expects the partnership to contribute more meaningfully to revenue beginning in 2027. Shoulder Innovations also expects its first surgeries using devices from a separate soft tissue partner around year-end.

On clinical evidence, Ball said the company’s registry was approaching 900 enrolled patients. A site contributing retrospective data has received institutional review board approval, allowing approximately 250 additional patients to be incorporated into the data set.

About Shoulder Innovations (NYSE:SI)

Shoulder Innovations, Inc is a medical device company focused on developing and commercializing products for shoulder arthroplasty, or shoulder replacement surgery. The company aims to address challenges associated with conventional shoulder-replacement procedures through implant designs intended to support surgical efficiency, fixation, and patient outcomes.

Its product portfolio includes shoulder replacement systems and related components, including glenoid implants and technologies designed for anatomic and reverse shoulder arthroplasty procedures.

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