Release Date: March 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights into the expected contributions from different business segments and any seasonal trends for 2025? A: David Bailey, CEO, explained that the company expects consistent seasonality, with June, July, and August being the biggest months. The EUMDR clearance is anticipated to positively impact the business in 2025, with more significant effects in 2026 and 2027. Scoliosis is expected to grow faster than trauma and deformity, with scoliosis seeing strong growth in Europe despite limited product availability.
Q: Could you elaborate on the growth opportunities and strategic rationale for OPSB? A: David Bailey, CEO, highlighted that OPSB is a major growth driver, with a $500 million TAM. The company plans to expand clinics and product offerings, leveraging synergies with the implant business. The goal is to establish a dominant position in clinics, creating a powerful channel for revenue growth. The demand for OPSB services and products is higher than expected, with rapid growth in devices like DF2.
Q: How do you view the potential impact of Medicaid coverage changes on your business? A: David Bailey, CEO, expressed uncertainty about the impact but emphasized the belief that children will not be left without healthcare. Many customers are in endowed hospitals or systems like Shriners that provide care regardless of insurance. The company believes its devices have a positive impact on the total cost of care, making them essential for hospitals.
Q: What are the expectations for gross margin improvements, and are there opportunities for upside? A: Fred Height, CFO, mentioned that while the company is conservative in its guidance, there are opportunities for gross margin improvements through consolidation and other activities. The focus is on leveraging cost efficiencies and maintaining a flat gross margin guidance, with potential upside as new products launch and European approvals are obtained.
Q: Can you provide an update on the Playbook enabling technology and the new fusion implant system? A: David Bailey, CEO, stated that Playbook was launched to the sales team and is progressing well, with revenue contributions expected in 2026 and beyond. The new fusion implant system is on track for potential surgeries by the end of 2025, but revenue from it is not included in the 2025 forecast. The existing fusion business is growing rapidly, allowing for a measured approach to the new system's launch.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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