Treace Medical Concepts Q2 Earnings Call Highlights

Key Points

• Q2 revenue fell 4% to $45.4 million, pressured by lower stocking-distributor kit sales and a shift toward lower-priced minimally invasive products. However, procedure-volume growth accelerated to the high-single-digit range, while the net loss and adjusted EBITDA loss improved year over year.
• Treace raised its 2026 revenue outlook to $204 million–$212 million and narrowed its adjusted EBITDA loss forecast to $3 million–$5 million. Management expects revenue growth to resume in the fourth quarter and anticipates positive adjusted EBITDA in that period.
• Adoption of the Nanoplasty, Percuplasty and SpeedMTP bunion systems expanded, with 40% of Lapiplasty surgeons using at least one new platform. The company is also broadening its foot-and-ankle portfolio, with new products expected to expand its U.S. addressable market by approximately $300 million.

Treace Medical Concepts NASDAQ: TMCI reported second-quarter 2026 revenue of $45.4 million, down 4% from the prior-year period, as lower procedure-kit sales to stocking distributors and a continued shift toward lower-priced minimally invasive products weighed on reported sales.

Chief Executive Officer John Treace said the company saw accelerating year-over-year procedure volume growth, reaching the high-single-digit range during the quarter. Excluding stocking-distributor sales, the company sold more procedure kits than it did in the second quarter of 2025, according to Chief Financial Officer Mark Hair.

The company raised its full-year revenue outlook, while also narrowing its projected adjusted EBITDA loss range. Management said it expects revenue growth to return in the fourth quarter, which it described as its seasonally strongest period.

Financial Results and Updated Outlook

Treace reported a second-quarter net loss of $15.9 million, or $0.24 per share, compared with a loss of $17.4 million, or $0.28 per share, a year earlier. Gross margin was 78.5%, compared with 79.7% in the prior-year quarter.

Total operating expenses declined 8% to $50.6 million. Adjusted EBITDA was a loss of $3.5 million, slightly improved from a $3.6 million loss in the second quarter of 2025. Hair said the company’s year-to-date cash usage fell 57%, or $3.6 million, from the comparable period last year.

Cash, cash equivalents and marketable securities totaled $45.6 million as of June 30.

• Full-year 2026 revenue guidance was raised to $204 million to $212 million, from prior guidance of $202 million to $212 million.
• The revised range implies a revenue decline of 4% to flat compared with full-year 2025.
• Adjusted EBITDA guidance was updated to a loss of $3 million to $5 million, compared with earlier guidance for a loss of $4 million to $6 million.
• The company reiterated its expectation for approximately a 50% reduction in cash usage for 2026 versus 2025.

Hair said revenue declines are expected to persist until the fourth quarter. He added that management expects third-quarter revenue to increase sequentially from the second quarter before a larger seasonal step-up in the fourth quarter.

New Bunion Systems Drive Surgeon Adoption

Management attributed the improvement in procedure volume partly to adoption of three bunion systems launched in the third quarter of 2025: Nanoplasty, Percuplasty and SpeedMTP. The systems are intended to extend Treace’s reach beyond its Lapiplasty platform.

Treace said about 40% of its Lapiplasty surgeon-user base had used at least one of the three newer bunion systems through the second quarter, up from 35% reported in the first quarter. The company has more than 3,300 existing surgeon customers.

Treace said Lapiplasty has historically captured about 25% of the bunion-related procedure volume performed by its surgeon customers, on average. Management views the newer platforms as addressing much of the remaining procedure opportunity, including minimally invasive osteotomy procedures and MTP fusion procedures.

About 30% of surgeons who initially became Treace customers through one of the three new bunion systems have also used Lapiplasty, management said, which it described as a pull-through effect for the flagship technology.

During the question-and-answer session, John Treace said surgeons who prefer minimally invasive procedures without use of a rotary cutting burr have tended to gravitate toward Nanoplasty, while surgeons already familiar with burr-based techniques may choose Percuplasty. He said SpeedMTP has experienced broad adoption across the company’s customer base.

Expanded Foot and Ankle Portfolio

Treace also discussed efforts to broaden its portfolio beyond bunion correction and participate in more foot and ankle procedures performed by its surgeon customers.

During the second quarter, the company initiated a limited commercial release of its SuperBite compression screw system. Treace expects to fully commercialize SuperBite during the third quarter. The system is designed with self-drilling and countersinking features intended to reduce or, in some cases, eliminate pre-drilling.

Management said SuperBite can be used as an add-on in existing Lapiplasty and Adductoplasty procedures, as well as in stand-alone procedures. John Treace said the revenue contribution can vary widely depending on the procedure and accompanying products, ranging from several hundred dollars for certain uses to larger cases incorporating multiple implants and biologics.

The company also completed initial cases using its HyperPlate XM dynamic compression locking implant technology for midfoot and hindfoot fusion applications. Treace recently commercialized its GreatReleaseXM instrument, designed to help surgeons access and prepare larger joints for fusion.

In the fourth quarter, Treace plans to introduce CartiBlaster powered joint-preparation rasps for midfoot and hindfoot fusion procedures. In response to an analyst question, John Treace said the combined opportunity for SuperBite, HyperPlate XM, CartiBlaster and GreatReleaseXM expands the company’s U.S. total addressable market by about $300 million.

Fourth-Quarter Expectations

Treace said it remains on track for a limited commercial launch of its next-generation Lapiplasty Lightning platform in the fourth quarter. The platform includes new 3D correction instrumentation and SpeedTMT implants designed to simplify workflow, reduce procedure time and improve surgeon control over correction.

The company also highlighted IntelliGuide, its patient-specific planning and cut-guide system for Lapiplasty bunion and Adductoplasty midfoot corrections.

Management said the anticipated fourth-quarter improvement should be supported by accelerating case volumes, the annualization of product-mix effects from the 2025 bunion launches and contributions from products introduced in 2026. Hair said the company expects to report positive adjusted EBITDA in the fourth quarter and anticipates continued profitability improvement in 2027, though he said it was too early to provide detailed guidance for next year.

Addressing the elective-procedure environment, John Treace said the company had not seen a material impact on its patient population and had not heard indications from customers of a significant change in seasonal demand. He noted that bunion procedures are typically softer during the summer months.

About Treace Medical Concepts (NASDAQ:TMCI)

Treace Medical Concepts, Inc is a medical technology company specializing in the development and commercialization of innovative surgical solutions for foot and ankle conditions. The company's flagship product, the Lapiplasty 3D Bunion Correction System, addresses the underlying joint instability that causes bunion deformity through a patented, multi-plane correction approach. The system combines proprietary instrumentation, fixation plates, and a comprehensive surgical protocol designed to improve patient outcomes and reduce recurrence rates.

The Lapiplasty System has received clearance from the U.S.

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