TELA Bio — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported revenue of $19.0 million for the third quarter of 2026, a decrease of 8% compared to $20.7 million in the same period of 2025.
• Gross profit was $12.3 million (64.9% of revenue) in Q3 2026, down from $14.0 million (67.5% of revenue) in Q3 2025; adjusted gross margin excluding non-cash charges was 71%.
• Total operating expenses excluding other expenses were $17.6 million in Q3 2026, a 17.5% decrease from $21.4 million in Q3 2025.
• Loss from operations was $7.3 million in Q3 2026, compared to $7.6 million in Q3 2025.
• Adjusted EBITDA loss was $3.4 million in Q3 2026, an improvement of 39% compared to $5.7 million in Q3 2025; sequentially, the adjusted EBITDA loss decreased by 55% compared to Q2 2026.
• GAAP net loss was $9.3 million ($0.16 per share) in Q3 2026, compared to $8.6 million ($0.19 per share) in Q3 2025.
• Adjusted net loss was $7.3 million ($0.13 per share) in Q3 2026, compared to $8.4 million ($0.18 per share) in Q3 2025.
• Cash and cash equivalents totaled $22.7 million as of September 30, 2026, down from $50.8 million as of December 31, 2025.
• Current debt increased to $56.3 million as of September 30, 2026, compared to zero current debt and $55.7 million in long-term debt as of December 31, 2025.

Guidance and Future Outlook:

• Announced a strategic cost reduction initiative aimed at reducing annual operating expenses by $17.0 million.
• The cost reduction initiative is projected to extend the company's cash runway into 2028.
• Management expressed confidence in returning to top-line growth and executing a long-term strategy.

Business Segments and Product Lines:

• International revenue increased by 18% year-over-year in the third quarter of 2026.
• Sequential revenue growth was delivered in the US hernia market.
• OviTex PRS volumes declined, contributing to the overall revenue decrease.
• Received 510(k) clearance for the Liora Monofilament Scaffold for soft tissue reinforcement.
• Published four peer-reviewed clinical results demonstrating favorable outcomes for OviTex and OviTex PRS.
• Gained market share across the OviTex hernia portfolio.

Market and Competitive Landscape:

• The company positions OviTex as best-in-class technology within the evolving soft tissue repair and reconstruction market.
• Clinical data demonstrates favorable outcomes for OviTex and OviTex PRS compared to gold standard synthetic and biologic alternatives.

Risks and Challenges:

• Revenue decline was driven by lower OviTex PRS volumes and a higher charge for excess and obsolete inventory as a percentage of revenue.
• Forward-looking statements highlight risks including macroeconomic conditions, inflation, pricing pressures, supply chain disruptions, and potential hospital staffing shortages.
• Risks include the ability to achieve profitability, gain market acceptance, and maintain coverage and reimbursement for procedures.

Management Commentary and Tone:

• CEO Heather Getz stated her first quarter focused on implementing a plan to return TELA Bio to growth, citing belief in OviTex technology and market positioning.
• Management highlighted that the cost reduction initiative allows for thoughtful resource reallocation to support growth and extend cash runway.
• Management expressed conviction that products deliver significant value for patients, clinicians, and hospital administrators based on commercial market share gains.

Other Key Points:

• Regained compliance with Nasdaq minimum bid price requirement for continued listing on the Nasdaq Global Market.
• Recognized $1.7 million in severance expense and $0.3 million in legal-related expenses related to the cost reduction initiative in Q3 2026.
• Conference call scheduled for November 10, 2026, at 4:30 p.m. Eastern Time to discuss results.