Treace Medical Concepts — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the third quarter of 2026 was $48.3 million, a 4% decrease from $50.2 million in the third quarter of 2025.
• Gross profit was $38.4 million in Q3 2026 compared to $39.7 million in Q3 2025; gross margin improved to 79.5% from 79.1%.
• Total operating expenses decreased 10% to $49.9 million in Q3 2026 from $55.4 million in Q3 2025.
• Net loss for Q3 2026 was $12.6 million ($0.19 per share), an improvement of 23% from $16.3 million ($0.26 per share) in Q3 2025.
• Adjusted EBITDA for Q3 2026 was $0.3 million, an increase of $2.9 million from a loss of $2.6 million in Q3 2025.
• Year-to-date cash usage decreased 53% or $9.7 million compared to the same period in 2025.
• Cash, cash equivalents, and marketable securities totaled $39.8 million as of September 30, 2026.
• Long-term debt, net, was $56.3 million as of September 30, 2026, compared to $55.6 million as of December 31, 2025.
• The company has an existing credit facility providing up to $115 million of additional borrowing capacity.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance updated to $206 million to $210 million, representing a 3% to 1% decline compared to full-year 2025.
• Full-year 2026 Adjusted EBITDA loss guidance updated to $1.0 million to $2.0 million, improving from a prior range of $3.0 million to $5.0 million.
• Full-year 2025 Adjusted EBITDA loss was $3.9 million.
• The company expects a reduction in cash usage of approximately 50% for full-year 2026 compared to full-year 2025.
• Guidance assumes continued case volume growth and improving year-over-year revenue growth rates.

Business Segments and Product Lines:

• The company achieved double-digit procedure volume growth in the third quarter.
• Approximately 45% of Lapiplasty® surgeon users now incorporate one or more of the three new bunion systems launched in Q3 2025, up from 40% in Q2 2026.
• Revenue decline was driven by a shift toward lower-priced minimally invasive products and lower volume of bunion procedure kits sold.
• Excluding sales to stocking distributors, bunion kit sales volume increased, and revenue grew mid-single digits compared to Q3 2025.
• A 5-year prospective, multicenter study demonstrated long-term positive outcomes of the Lapiplasty® procedure.
• New product offerings include the SuperBite™ compression screws and an expanded bunion portfolio.

Market and Competitive Landscape:

• The company reported continued market share gains driven by the adoption of its comprehensive range of bunion systems.
• The company aims to be the recognized leader in the surgical treatment of bunions and other foot & ankle conditions.
• The foot and ankle market includes approximately 67 million Americans with bunions, with an estimated 1.1 million annual surgical candidates.

Risks and Challenges:

• Risks include increased competition, evolving surgeon and patient preferences for minimally invasive bunion solutions, and changes in tariffs and trade policies.
• Potential challenges include supply chain disruptions, protracted government and infrastructure shutdowns, and lower patient demand for elective bunion surgery due to macroeconomic uncertainty.
• The company faces risks related to cybersecurity attacks, including those facilitated by artificial intelligence.
• Risks also include the ability to protect and enforce intellectual property rights, including patent infringement suits, and defending against securities class actions.
• Actual results may differ from forward-looking statements due to high variability and complexity in excluded non-GAAP items.

Management Commentary and Tone:

• CEO John T. Treace expressed encouragement regarding the third quarter performance, citing accelerated double-digit case volume growth and market share gains.
• Management emphasized a balanced approach of disciplined investments in the product pipeline while focusing on improving profitability and reducing cash usage.
• Management believes the current strategy positions the company to build momentum and deliver stronger growth to finish the year.

Other Key Points:

• The company hosts a conference call on November 6, 2026, at 8:00 a.m. ET to discuss results, with a live webcast available on its Investor Relations website.
• The company uses Adjusted EBITDA as a non-GAAP measure to evaluate operating performance, excluding depreciation, amortization, interest, taxes, share-based compensation, acquisition costs, restructuring costs, customer credit loss, litigation costs, and debt extinguishment loss.
• A reconciliation of GAAP net loss to Adjusted EBITDA is provided, showing litigation costs of $2.7 million and no restructuring costs for Q3 2026.
• The company reported $21.4 million in share-based compensation expense for the nine months ended September 30, 2026, compared to $26.3 million in the same period of 2025.
• Accounts receivable decreased to $30.2 million as of September 30, 2026, from $42.2 million as of December 31, 2025.
• Inventory increased to $42.3 million as of September 30, 2026, from $36.0 million as of December 31, 2025.