Treace Medical Concepts — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported second quarter 2026 revenue of $45.4 million, a 4% decrease from $47.4 million in the same period in 2025.
• Second quarter 2026 gross profit was $35.6 million compared to $37.8 million in the second quarter 2025, with gross margin declining to 78.5% from 79.7%.
• Total operating expenses decreased 8% to $50.6 million in the second quarter 2026 from $54.7 million in the second quarter 2025, driven by targeted expense reduction initiatives.
• Net loss for the second quarter 2026 was $(15.9) million, or $(0.24) per share, compared to a net loss of $(17.4) million, or $(0.28) per share, in the second quarter 2025.
• Adjusted EBITDA for the second quarter 2026 was $(3.5) million, an improvement from $(3.6) million in the second quarter 2025.
• Year-to-date cash usage decreased by 57% or $3.6 million compared to the same period in 2025.
• Cash, cash equivalents, and marketable securities totaled $45.6 million as of June 30, 2026.
• Long-term debt, net, was $56.0 million as of June 30, 2026, compared to $55.6 million as of December 31, 2025.
• Accounts receivable decreased to $28.7 million as of June 30, 2026, from $42.2 million as of December 31, 2025.

Guidance and Future Outlook

• Raised full-year 2026 revenue guidance to a range of $204 million to $212 million, representing a decline of 4% to 0% compared to full-year 2025 (previously $202 million to $212 million).
• Updated full-year 2026 Adjusted EBITDA loss guidance to a range of $3.0 million to $5.0 million, improving from a previous range of $4.0 million to $6.0 million.
• Reiterated expectation for a 50% reduction in cash usage for full-year 2026 compared to full-year 2025.
• Guidance assumes continued case volume growth and improving year-over-year growth rates in the second half of the year as headwinds annualize.

Business Segments and Product Lines

• Approximately 40% of Lapiplasty® surgeon users incorporated one or more of the three new bunion systems launched in the third quarter 2025, up from 35% in the first quarter of 2026.
• Initiated limited market release of the SuperBite™ Compression Screw System.
• Completed the first surgical case with the HyperPlate™ XM Dynamic Compression Locking Implant System.
• The company's expanded portfolio now provides access to a broader range of procedures throughout the foot & ankle.

Market and Competitive Landscape

• Management reported accelerating year-over-year case volumes and market share gains resulting from increasing surgeon adoption of the comprehensive bunion portfolio.
• The company faces headwinds including increased competition, evolving surgeon and patient preferences for minimally invasive bunion solutions, and lower patient demand for elective bunion surgery due to macroeconomic uncertainty and soft consumer sentiment.

Risks and Challenges

• Potential risks include protracted government shutdowns, changes in tariffs and trade policies, and the ability to defend against securities class actions and intellectual property infringement suits.
• Forward-looking statements note that actual results may differ materially due to risks such as the variability of excluded non-GAAP items and the pace of growth in the foot and ankle market.

Management Commentary and Tone

• John T. Treace, CEO and Chairman, stated the company is pleased with second quarter results driven by accelerating case volumes and market share gains.
• Management emphasized a continued focus on investing in growth initiatives to leverage the expanded portfolio while driving profitability to position the company for stronger growth in the second half of the year.

Other Key Points

• The Company's existing credit facility provides an additional $115 million of liquidity subject to certain conditions.
• The company reported a full-year 2025 Adjusted EBITDA loss of $3.9 million.
• Share-based compensation expense for the six months ended June 30, 2026, was $14.5 million, down from $18.3 million in the same period in 2025.
• Litigation costs related to intellectual property lawsuits were $2.1 million for the second quarter 2026 and $4.3 million for the six months ended June 30, 2026.
• Restructuring costs were $0.8 million for the second quarter 2026 and $1.0 million for the six months ended June 30, 2026.