Treace Medical’s Earnings Call: Growth Amid Challenges

Treace Medical Concepts, Inc. ((TMCI)) has held its Q3 earnings call. Read on for the main highlights of the call.

Meet Your ETF AI Analyst

• Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
• Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.

The recent earnings call for Treace Medical Concepts, Inc. presented a mixed sentiment, highlighting both achievements and challenges. The company reported notable revenue growth and improved adjusted EBITDA, yet faced hurdles such as a revised revenue outlook, pressure on Lapiplasty volumes, and economic impacts on elective procedures.

Revenue Growth

Treace Medical reported third quarter revenues of $50.2 million, marking an 11% growth over the same period in 2024. This increase was largely driven by a rise in bunion procedure kits sold, showcasing the company’s ability to expand its market presence despite broader economic challenges.

Adjusted EBITDA Improvement

The company achieved a significant 49% improvement in adjusted EBITDA compared to the previous year. The third quarter adjusted EBITDA loss was reduced to $2.6 million from $5.1 million in Q3 2024, indicating better operational efficiency and cost management.

Expansion of Product Portfolio

Treace Medical has successfully developed and commercialized three new bunion correction systems. This expansion is aimed at addressing nearly 100% of surgeon preferences for bunion correction, positioning the company to better meet market demands and enhance its competitive edge.

Sales Team Expansion

In a strategic move to bolster its sales capabilities, Treace Medical appointed a new Chief Commercial Officer and a Senior Vice President of Sales. These additions bring leading foot and ankle sales expertise to the team, which is expected to drive future sales growth.

Increased Liquidity

As of September 30, 2025, Treace Medical’s total liquidity was $80.6 million. The company managed to decrease its cash usage by 17% in Q3 2025 compared to the previous year, reflecting prudent financial management.

Revised Revenue Outlook

The company revised its full-year 2025 revenue outlook to a range of $211 million to $213 million, representing a modest growth of only 1% to 2% compared to 2024. This revision reflects the challenges posed by shifting market dynamics and economic conditions.

Decline in Lapiplasty Volumes

Treace Medical faced pressure on Lapiplasty volumes as surgeon and patient preferences shifted towards minimally invasive osteotomies. This trend necessitated strategic adjustments to align with evolving market demands.

Economic and Consumer Sentiment Impact

Broader economic conditions and softer consumer sentiment have led to an increase in deferrals of elective bunion procedures. This has impacted the company’s performance, highlighting the sensitivity of elective procedures to economic fluctuations.

Net Loss Increase

The third quarter net loss increased by 6% to $16.3 million compared to $15.4 million in the same period of 2024. This underscores the financial challenges the company is navigating amid market pressures.

Stocking Distributor Sales Impact

The third quarter benefited from approximately $6 million in stocking distributor sales, with half of this amount exceeding plans. However, this creates a headwind for the fourth quarter, as the company anticipates a $3 million impact.

Forward-Looking Guidance

Looking ahead, Treace Medical plans to focus on expanding its product portfolio, increasing surgeon training, and enhancing its sales team’s capabilities to drive market share and profitability in 2026. The company anticipates case volume growth, albeit at lower average selling prices, and aims to navigate the headwinds from stocking distributor sales in Q4.

In summary, the earnings call for Treace Medical Concepts, Inc. reflected a balanced mix of positive developments and challenges. While the company achieved revenue growth and improved adjusted EBITDA, it faces hurdles such as a revised revenue outlook and economic impacts on elective procedures. Moving forward, Treace Medical’s strategic focus on product expansion and sales enhancement aims to strengthen its market position and drive future profitability.