What Treace Medical Concepts (TMCI) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue fell 4% to $48.3 million, as lower-priced products and reduced stocking-distributor orders offset double-digit case-volume growth. Treace narrowed its 2026 revenue outlook to $206 million–$210 million and expects revenue to return to growth in Q4.
• Treace narrowed its net loss to $12.6 million and posted positive adjusted EBITDA of $0.3 million, while operating expenses fell 10%. It expects full-year adjusted EBITDA loss of $1 million–$2 million and about a 50% reduction in cash usage.
• The company is expanding its foot-and-ankle portfolio: about 45% of Lapiplasty surgeons had tried at least one of three newer bunion systems, and 2026 product launches are expected to add roughly $700 million to its addressable market.

Treace Medical Concepts NASDAQ: TMCI reported a 4% decline in third-quarter revenue as a shift toward lower-priced products and lower bunion procedure kit sales offset growth in procedure volumes. The company narrowed its full-year revenue outlook and said it expects to return to growth in the fourth quarter.

Revenue fell to $48.3 million from the prior-year period, Chief Financial Officer Mark Hair said on the earnings call. Excluding sales to stocking distributors, bunion kit sales volume increased and revenue grew in the mid-single digits. Hair said the impact of stocking distributor orders should decrease significantly after the third quarter.

Chief Executive Officer John Treace said the company saw double-digit case volume growth as surgeons adopted its expanded portfolio of bunion and foot and ankle products. He said newer minimally invasive products generally carry lower average selling prices than the company’s Lapiplasty system, although some complex midfoot and rearfoot cases have higher prices.

Loss Narrows as Operating Expenses Fall

Treace’s third-quarter net loss narrowed to $12.6 million, or 19 cents per share, from $16.3 million, or 26 cents per share, a year earlier. Operating expenses declined 10% to $49.9 million, while gross margin increased to 79.5% from 79.1%.

The company reported positive adjusted earnings before interest, taxes, depreciation and amortization of $0.3 million, compared with an adjusted EBITDA loss of $2.6 million in the prior-year quarter. Cash, cash equivalents and marketable securities totaled $39.8 million as of Sept. 30.

Cash usage for the first nine months of 2026 fell 53%, or $9.7 million, from the same period in 2025. Treace reiterated its expectation that cash usage for the full year will decline by approximately 50%.

Guidance Calls for Fourth-Quarter Growth

Treace narrowed its 2026 revenue forecast to $206 million to $210 million from a previous range of $204 million to $212 million. The updated range represents a decline of 1% to 3% from 2025 revenue.

The company also updated its full-year adjusted EBITDA outlook to a loss of $1 million to $2 million, compared with a $3.9 million loss in 2025.

Hair said management’s view of the seasonally strong fourth quarter was unchanged. The expected return to revenue growth relies on higher procedure volumes, a diminishing impact from the product mix shift associated with 2025 launches, and contributions from new products introduced in 2026.

Asked about 2027, Hair declined to provide a forecast. He said the company wants to assess fourth-quarter case volumes and gain more experience with its newer products before issuing guidance on its fourth-quarter call.

Broader Portfolio Drives Surgeon Adoption

Treace said it is working to increase adoption of Nanoplasty, Percuplasty and SpeedMTP, three bunion systems launched in the third quarter of 2025. Through the third quarter of 2026, approximately 45% of Lapiplasty surgeons had used at least one of those systems, up from 40% through the second quarter.

About 30% of surgeons who initially became customers through the newer systems were also using Lapiplasty products, the CEO said. He described repeat use of the newer systems as high but did not provide a specific rate.

The company estimates that its 2026 product introductions will expand its total addressable market by approximately $700 million. That includes an estimated $400 million from four products aimed at a broader range of foot and ankle procedures: the SuperBite compression screw, HyperPlate fixation plate, VitaFuse synthetic bone graft and CartiBlaster joint preparation rasps.

SuperBite was fully launched in the third quarter. Treace said it expects to fully commercialize VitaFuse and CartiBlaster in the fourth quarter. The company also announced initial cases using Tailorplasty, a system for correcting bunionettes, with full commercialization anticipated in the first quarter of 2027.

For Lapiplasty, Treace is preparing to launch its Lightning platform in the first quarter of 2027. The CEO said a five-year clinical study of the existing Lapiplasty procedure showed low radiographic recurrence rates and improvements in pain and patient-reported outcomes.

Sales Force and Spending Plans

Treace said the company plans to modestly expand its direct sales channel, with incremental rather than large-scale investment. Existing representatives can offer additional products in cases they already attend and support more procedures for current surgeon customers, he said.

Hair said Treace does not anticipate dramatic changes to operating expenses, though it expects some incremental increases. He added that the company believes it can continue to improve operating leverage and profitability.

About Treace Medical Concepts (NASDAQ:TMCI)

Treace Medical Concepts, Inc is a medical device company focused on developing and commercializing products for the surgical treatment of bunion deformities and other conditions affecting the foot and ankle. The company's technologies are designed to address the underlying structural causes of bunions and support more stable correction than traditional surgical approaches.

Treace's primary product is the Lapiplasty 3D Bunion Correction System, which is used by foot and ankle surgeons to correct bunions in three dimensions.

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