Executive Summary / Key Takeaways

• SI-BONE is demonstrating robust top-line growth, with worldwide revenue reaching $48.7 million in Q3 2025, an approximate 21% year-over-year increase, driven by strong U.S. demand and an expanding product portfolio.
• The company has achieved significant profitability and liquidity milestones, including positive adjusted EBITDA of $2.3 million in Q3 2025 (a 5% margin) and its first quarter of meaningful positive operating cash flow, reinforcing confidence in achieving positive free cash flow in 2026.
• Technological differentiation, particularly with its proprietary 3D-printed titanium implants like iFuse TORQ and Bedrock Granite, is expanding its addressable market in SI joint dysfunction, pelvic fixation, and pelvic trauma, supported by favorable reimbursement.
• Strategic commercial execution, including a hybrid sales model and record physician engagement, is driving increased procedure density and territory productivity, with plans to reach 100 territories over the next 12-18 months.
• The company's outlook for 2025 anticipates worldwide revenue of $198 million to $200 million (18-20% growth) and a full-year gross margin of 79.5%, signaling continued strong performance and margin expansion.

A Specialist's Rise in Sacropelvic Solutions

SI-BONE, Inc. has carved out a distinctive niche in the medical device industry, pioneering minimally invasive surgical implant systems for musculoskeletal disorders of the sacropelvic anatomy. Since its incorporation in 2008 and the launch of its first-generation iFuse implant in 2009, the company has strategically expanded its portfolio to address a broad spectrum of unmet clinical needs, including sacroiliac (SI) joint dysfunction, pelvic fixation, and pelvic trauma. This focused approach has allowed SI-BONE to establish itself as a leader in a specialized, yet large and underpenetrated, market.

The company's overarching strategy centers on leveraging its deep biomechanical and clinical expertise to develop anatomy-specific solutions, supported by robust clinical evidence and a comprehensive commercial infrastructure. This has enabled SI-BONE to drive physician adoption and secure favorable reimbursement, positioning its products as preferred solutions across a diverse base of orthopedic, neurospine, trauma, and interventional spine physicians. The broader industry trend towards minimally invasive procedures and the shift of cases to ambulatory surgery centers (ASCs) and office-based labs (OBLs) further amplify SI-BONE's market opportunity.

Technological Edge: Engineering for Compromised Bone

At the core of SI-BONE's investment thesis is its highly differentiated technology, particularly its proprietary 3D-printed titanium implants. These implants, exemplified by iFuse-3D, iFuse TORQ, and iFuse Bedrock Granite, are designed to provide superior fixation and fusion in compromised bone, a common challenge in sacropelvic anatomy. The unique triangular cross-section, 3D-printed porous surface, and fenestrated design of these implants offer tangible benefits over traditional alternatives, promoting biological fixation and mechanical stability.

Clinical studies underscore the quantifiable advantages of SI-BONE's technology. The SILVIA study demonstrated that iFuse-3D implants reduced the incidence of new-onset SI joint pain when used with pelvic fixation. Results from the SAFFRON study, published in May 2025, showed a higher rate of mobility recovery after surgical treatment using iFuse TORQ for sacral fragility fractures. Furthermore, early results from the STACI study, published in June 2025, indicated a low adverse event rate and early improvement in pain and function when iFuse TORQ was placed by interventional pain management physicians. Notably, a recent publication highlighted a significantly lower incidence of screw failures with Granite, with no reported incidents of breakage and back out, compared to traditional pelvic screws. These clinical outcomes translate directly into improved patient care and a compelling value proposition for healthcare providers.

SI-BONE's commitment to innovation is evident in its robust research and development pipeline. The company is on track to launch a new SI joint fusion solution in Q1 2026, for which a 510(k) application has been filed. This next-generation technology is optimized for the ASC environment and aims to simplify physician workflow, further extending SI-BONE's leadership in this fast-growing site of service. Additionally, the company is making significant headway on its third breakthrough device, which leverages its core technology to address a pressing need in spine surgery. A 510(k) submission for this revolutionary solution is anticipated in 2026, with potential commercialization as early as the same year. These advancements are expected to expand SI-BONE's addressable market and solidify its competitive moat, contributing to higher average selling prices (ASPs) and sustained market leadership.

Competitive Arena: Differentiating in a Crowded Field

SI-BONE operates within the broader medical device industry, competing with larger, more diversified players such as Medtronic (MDT), Johnson & Johnson (JNJ) (through DePuy Synthes), Stryker (SYK), and Zimmer Biomet (ZBH). While these rivals offer extensive portfolios across spinal and orthopedic implants, SI-BONE distinguishes itself through its specialized focus on sacropelvic disorders and its proprietary, anatomy-specific implant systems. This niche expertise allows SI-BONE to offer solutions that often provide superior anatomical fit and potentially faster procedure times for targeted applications.

SI-BONE's direct sales force and hybrid commercial model, which incorporates third-party sales agents, are critical differentiators. This approach fosters strong physician engagement and allows for efficient market penetration, particularly in specialized areas like pelvic fixation and trauma. For instance, the company's iFuse-TORQ TNT, designed for sacral insufficiency fractures, has seen a threefold increase in trauma surgeons using its solutions since launch, with multiple large national distributor networks expressing interest in partnerships. This contrasts with the broader market positioning and economies of scale enjoyed by larger competitors, who may offer more generalized implants.

Despite the competitive landscape, SI-BONE has demonstrated its ability to maintain and grow market share. Even with Globus (GMED) having an existing SI joint solution (SI-LOK), SI-BONE not only maintained its market leadership but increased its overall market share with the introduction of TORQ. The company's strategy to expand its platform with differentiated solutions is further substantiated by competitive dynamics, as it allows SI-BONE to serve both surgeons and interventionalists effectively. Barriers to entry in this segment, including stringent regulatory approvals and substantial R&D requirements, also help protect SI-BONE's market position.

Financial Momentum: From Growth to Profitability and Cash Flow

SI-BONE's strategic execution and technological advantages are translating into robust financial performance and a significant inflection point in its profitability and liquidity. For the three months ended September 30, 2025, worldwide revenue reached $48.7 million, marking approximately 21% year-over-year growth. U.S. revenue, which constitutes over 95% of the total, grew by 21.2% to $46.4 million, primarily driven by increased case volumes from an expanded product portfolio. For the nine months ended September 30, 2025, total revenue was $144.6 million, a 22.3% increase over the prior year.

The company's gross profit for Q3 2025 increased by $6.9 million, resulting in a gross margin of 79.8%, an expansion from 79.1% in the prior year. This improvement is attributed to lower product costs, supply chain optimization initiatives, and a disciplined pricing strategy. Operating expenses for Q3 2025 increased by 11.9% to $44.2 million, reflecting growth-related investments and higher commissions. Notably, SI-BONE achieved a 1.7 times operating leverage in the quarter, underscoring the efficiency and scalability of its business model.

A significant financial milestone was achieved in Q3 2025, with the company reporting positive adjusted EBITDA of $2.3 million, translating to an adjusted EBITDA margin of approximately 5%. This marks a dramatic improvement from an adjusted EBITDA loss of $11.7 million in the comparable prior year period for the trailing twelve months. Furthermore, SI-BONE achieved its second consecutive quarter of net cash flow breakeven and its first quarter of meaningful positive cash flow from operating activities, which was $2.3 million. This earlier-than-expected inflection in cash flow reinforces management's confidence in achieving positive free cash flow in 2026.

As of September 30, 2025, the company maintained a healthy liquidity position with $145.7 million in cash and marketable securities, while its outstanding debt remained at $35.5 million.

Strategic Initiatives and Outlook: Fueling Future Expansion

SI-BONE's forward-looking strategy is built on four key priorities: innovation, physician engagement, commercial execution, and operational excellence. The company's physician engagement efforts are yielding impressive results, with approximately 1,530 physicians performing procedures in Q3 2025, a 27% year-over-year increase. This included a record 330 new physicians added in the quarter. The company is actively cultivating the next generation of advocates through its academic training program, which has trained approximately 2,100 surgical residents and fellows in over 300 U.S. academic programs.

Commercial execution is driving increased productivity, with the trailing twelve-month average revenue per territory sales manager reaching approximately $2.1 million as of September 30, 2025, up 16% from the prior year. SI-BONE plans to increase its number of territories, targeting 100 over the next 12-18 months, while strategically expanding its hybrid network with third-party sales agents. This approach ensures broad market reach while maintaining operational efficiency.

Market expansion is a key growth driver across all modalities. In SI joint dysfunction, interventional case volume doubled compared to Q3 2024, supported by a projected 17% increase in reimbursement for office-based SI joint procedures in 2026. For pelvic fixation, Granite is gaining traction in the adult deformity market and is steadily expanding into the degenerative spine procedure market, which represents nearly 100,000 annual procedures. The transitional pass-through (TPT) payment for Granite, with a $0 device offset, is expected to be extended for calendar year 2026, and a proposed Level 7 APC payment of nearly $28,000 could compensate hospitals for complex multi-level spine fusion procedures performed on an outpatient basis. In pelvic trauma, iFuse TORQ TNT has contributed to a threefold increase in trauma surgeons using SI-BONE solutions. A new technology add-on payment (NTAP) of over $4,100, effective October 1, 2025, represents up to a 30% increase in hospital reimbursement for pelvic fracture fixation in Medicare patients, positioning TNT for significant growth in a nearly $300 million market opportunity.

For the full year 2025, SI-BONE has updated its revenue guidance to a range of $198 million to $200 million, implying year-over-year growth of approximately 18% to 20%.

The company expects a full-year gross margin of 79.5% and anticipates annual operating expense growth of 10% at the midpoint of its revenue range. Management projects positive adjusted EBITDA for the full year 2025 and is confident in sustaining strong top-line growth, expanding margins, and achieving positive free cash flow in 2026. However, operating leverage in 2026 is expected to be at the lower end of the 1.25 to 1.75 times range, around 1.3 times, due to significant new product launches and associated upfront investments.

Risks and Challenges: Growth's Undercurrents

Despite its strong momentum, SI-BONE faces several risks and challenges. The company received a civil investigative demand from the U.S. Department of Justice in October 2024, related to an investigation under the federal Anti-Kickback Statute and Civil False Claims Act. While SI-BONE is cooperating, the duration and financial impact of this investigation remain uncertain.

Uncertainty in the coverage and reimbursement environment also poses a risk. Changes to CPT code definitions, particularly for 27279, could lead to a loss of value if procedures requiring lower work effort are reported under it. Ambiguity in coding for certain devices could also deter physicians from performing sacroiliac joint procedures. Furthermore, disruptions in the supply chain, including reliance on a limited number of suppliers for critical materials like titanium and sterilization services, could adversely affect the business. Geopolitical events, such as those involving Russia and Ukraine, could impact the wider titanium supply chain, although SI-BONE's titanium powder is sourced from Canada with supply secured through 2026. The company's stock price may also experience volatility due to macroeconomic factors, clinical trial results, and competitive pressures.

Conclusion

SI-BONE, Inc. stands at a pivotal juncture, transforming from a niche player into a dynamic, high-growth medical device platform. Its relentless focus on technological innovation, particularly with proprietary 3D-printed implants for compromised bone, has enabled it to address critical unmet clinical needs across SI joint dysfunction, pelvic fixation, and pelvic trauma. This technological leadership, coupled with a robust commercial strategy and expanding clinical evidence, is fueling impressive revenue growth and a significant inflection towards sustained profitability and positive cash flow.

While challenges such as an ongoing DOJ investigation and reimbursement uncertainties persist, SI-BONE's strategic initiatives, including a strong product pipeline and expanding physician engagement, position it for continued market expansion. The company's disciplined financial management and asset-light business model underscore its potential to deliver long-term value for investors, making it a compelling story in the specialized medical device sector.