Treace Medical Concepts reported third‑quarter 2025 revenue of $50.2 million, an 11% year‑over‑year increase that surpassed consensus estimates of $49.6‑$49.7 million. The company posted a net loss of $0.26 per share, beating the $0.28 per share consensus by $0.02. Adjusted EBITDA improved to a loss of $2.6 million, a 49% year‑over‑year reduction from the $4.8 million loss reported in Q3 2024. Gross margin fell to 79.1% from 80.1% in the prior year, reflecting a shift toward lower‑average‑selling‑price products.
The revenue growth was driven by strong demand for the company’s expanded product portfolio, which now includes 3D minimally invasive surgery (MIS) systems, MTP fusion devices, Nanoplasty®, Percuplasty™, and SpeedMTP® systems. While the new MIS and fusion products contributed positively, volumes of the flagship Lapiplasty kit declined as surgeons and patients increasingly favor less invasive options. Compared with Q2 2025, revenue rose from $47.4 million, and compared with Q3 2024, it grew from $45.1 million, indicating a steady acceleration in top‑line performance despite the product‑mix shift.
Profitability metrics reveal that the company’s adjusted EBITDA loss narrowed because of tighter cost control and a higher mix of higher‑margin MIS and fusion products. However, the gross‑margin contraction signals pricing pressure and a lower average selling price as the company’s portfolio shifts toward lower‑priced items. The company’s operating expenses remained largely flat, so the improvement in adjusted EBITDA is attributable mainly to the product‑mix change rather than significant cost reductions.
Management revised its full‑year 2025 outlook, lowering revenue guidance to $211 million‑$213 million from the previous $224 million‑$230 million range, and adjusting the adjusted EBITDA loss guidance to $6.5 million‑$7.5 million from a prior breakeven expectation. The downward revision reflects concerns about softer elective procedure demand, macroeconomic headwinds, and the ongoing shift in surgeon preferences away from Lapiplasty toward MIS solutions. The guidance signals a cautious near‑term outlook while acknowledging the company’s continued investment in its expanded product line.
CEO John T. Treace said, “Our revenue growth in the third quarter reflects greater market penetration with our expanded portfolio of solutions, along with higher than planned sales to a limited number of stocking distributors that we do not expect to recur at the same level.” He added, “Lapiplasty volumes have been impacted as surgeons and patient preferences shift toward minimally invasive solutions, and we are seeing broader macroeconomic conditions and softer consumer sentiment resulting in a greater number of deferrals of elective bunion procedures.” The comments underscore the company’s focus on adapting to market dynamics while pursuing growth through its new MIS and fusion offerings.
The company’s strategic transformation from a single‑product Lapiplasty focus to a comprehensive bunion solutions provider is evident in the product‑portfolio expansion and the mixed performance of its core segments. The shift toward MIS and fusion devices offers higher volume potential but at lower average selling prices, creating margin compression. At the same time, the company’s ability to capture market share in the MIS space positions it to benefit from the broader industry trend toward less invasive procedures. The revised guidance reflects management’s assessment that, while revenue growth will continue, the pace will be slower than previously expected due to the combined effects of product‑mix changes and macroeconomic headwinds.
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