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Date

Monday, May 11, 2026 at 4:30 p.m. ET

Call participants

  • Chief Executive Officer — Laura Francis
  • Chief Financial Officer — Anshul Maheshwari

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Takeaways

  • Worldwide Revenue -- $52.6 million, reflecting year-over-year growth of 11.2%.
  • U.S. Revenue -- $49.3 million, increasing 10%, with prior-year comp impacted by three product launches.
  • International Revenue -- $3.3 million, up 33.9%, with demand driven by iFuse TORQ in Europe and Australia.
  • Gross Profit -- $41.9 million, up $4.2 million or 11.3% over the prior year.
  • Gross Margin -- 79.8%, flat year over year, attributed to better-than-anticipated ASP and favorable procedure mix.
  • Operating Expenses -- $47.0 million, representing 4.1% year-over-year growth from higher commissions and targeted investment in launches and pipeline.
  • Net Loss -- $4.3 million, or $0.10 per diluted share, versus a net loss of $6.5 million, or $0.15 per diluted share, in the prior year.
  • Adjusted EBITDA -- $2.5 million, up over 440% from $0.5 million a year ago.
  • Free Cash Flow -- Negative $3.4 million, a 50.7% improvement from the prior year, with commentary on seasonal impacts from commissions and bonus payouts.
  • Cash and Marketable Securities -- $144.7 million at quarter end, supporting further R&D and commercial infrastructure investment.
  • Raised Revenue Guidance -- Full-year 2026 revenue now expected in the range of $230 million to $233 million, implying 14%-16% growth.
  • Raised Gross Margin Guidance -- Annual gross margin guidance up 100 basis points to approximately 79%.
  • Operating Expenses Guidance -- Operating expenses projected to grow roughly 12.5% at the midpoint of revenue guidance.
  • Active Physicians -- More than 1,650 in the quarter, marking growth of more than 17% and extending double-digit quarterly expansion streak.
  • Annual Revenue per Territory Manager -- $2.2 million, with 11% growth and 14 consecutive quarters of double-digit territory productivity gains.
  • Territory Footprint -- 89 quota-carrying territory managers, with plans to expand to approximately 100 territories within 12 months.
  • Smith & Nephew Partnership -- Initial field rollout completed, with revenue contribution expected in the back half, particularly Q4, and market opportunity sized at 60,000 patients and approximately $300 million in annual TAM.
  • Launches -- Intra TI launched in U.S., TNT TORQ in Europe, and TORQ in Australia, with new products quickly building global market reach.
  • Breakthrough Device -- Third Breakthrough Device on track: "verification and validation are nearing completion," with 510(k) submission targeted for early Q3 and commercial launch expected in Q4.
  • Granite Reimbursement -- CMS proposal may boost average hospital payment by as much as $50,000 per Granite procedure, effective October 1, 2026.
  • Physician Case Mix -- Number of physicians performing more than one procedure type increased 10%; only 25% of SI joint fusion physicians currently use the platform across other indications.
  • Pipeline Advancement -- Multi-year innovation pipeline progressing ahead of plan, with additional products positioned for FDA submission and launch over next several years.

Summary

SI-BONE (SIBN 5.38%) increased its 2026 revenue and gross margin guidance on the back of double-digit global revenue growth and improved profitability metrics. Management stated that new product launches, especially Intra TI and TNT TORQ, are accelerating platform adoption and expanding clinical and geographic reach. CMS’s proposed DRG changes could deliver a material uplift to Granite-related procedure reimbursement, potentially driving broader hospital adoption. Higher physician engagement, successful commercial partnerships, and expansion of sales territories underpin the company’s expectations for sustained growth acceleration, including in underpenetrated international markets.

  • Maheshwari disclosed that the weather-related impact on Q1 revenue was "circa the half-million-dollar range," characterizing the effect as "pretty muted" with procedures largely rescheduled within 60 days.
  • Francis emphasized that the $2.2 million revenue per territory is "not the cap," with larger territories already achieving more than double that, and best-practices being replicated across the organization.
  • International segment, accounting for 5%-6% of total revenue, is "tracking well," and management is exploring further deployments for new products such as TNT, TORQ, and Granite in additional global markets.
  • The hybrid commercial model, combining direct managers, junior representatives, and more than 300 agents, is cited by management as a competitive advantage, particularly for scaling in spine and trauma segments.
  • Granite was cited in the POLA study of 160 patients published in March, demonstrating "zero Granite breakage or pullout" and meaningful improvements in pain and disability at 12 months post-procedure.
  • The CMS proposal "is significantly better than what we requested," according to Francis, since it creates a new DRG family for complex spine surgeries, mapping Granite as one of only two technologies to the new codes.
  • CapEx for instrument trays and surgical capacity expected at $9 million to $10 million annually, with an additional $4 million or more for the new headquarters, portions of which will be reimbursed through tenant-improvement allowances.
  • Adjusted EBITDA improvement, capital flexibility, and operating leverage position the company to invest in both innovation and commercial growth while progressing toward free cash flow breakeven.

Industry glossary

  • DRG (Diagnosis-Related Group): Hospital billing categories used by CMS and payers to determine reimbursement for inpatient procedures, aligning payment with case complexity and resource requirements.
  • ASP (Average Selling Price): The average price realized per unit for a medical device or procedure, reflecting mix and negotiated terms across channels.
  • OBL (Office-Based Lab): A medical facility where physicians perform minimally invasive procedures outside of a hospital or ambulatory surgery center environment.
  • NTAP (New Technology Add-On Payment): A temporary Medicare reimbursement increase granted to new devices or technologies that meet specific benefit criteria and are not reflected in existing DRGs.
  • 510(k) Submission: Pre-market notification filing with the FDA seeking clearance that a new device is substantially equivalent to a legally marketed predicate.

Full Conference Call Transcript

Laura Francis: Thanks, Saqib. Good afternoon, and thank you for joining us. In the first quarter, we advanced our platform strategy on multiple fronts. Underpinning these strategic priorities is our clear focus on developing disruptive technologies that address unmet clinical needs for our surgeons and interventionalists when treating patients with compromised bone. Our technologies are differentiated in how they uniquely adhere to low-density bone to enable more durable fusion and better outcomes relative to the current standards of care. We have never been better positioned as we accelerate growth through 2026 and into 2027. Our raised full-year outlook reflects that confidence.

To better frame our progress in the quarter, let me connect our recent activities around product launches and commercial partnerships to our overarching strategy. We are focused on expanding into high-value clinical segments, extending our leadership position across global markets, and doing so efficiently through our hybrid commercial model, including strategic collaborations. Intra TI, which was launched in the quarter, is not just an expansion of our SI joint portfolio; it is a deliberate focus to further build the interventional segment with a solution that aligns with the physician's workflow and site of care, while also providing another compelling solution for surgeons.

In Europe, the introduction of TNT TORQ expands our pelvic trauma portfolio and builds on the success we are seeing with TORQ. In Australia, the launch of TORQ extends our leadership in SI joint fusion and gives us a beachhead in pelvic fixation. The recently announced partnership with Smith & Nephew enables us to broaden our access to trauma while keeping our direct team focused on driving depth and density in spine and interventional. In the quarter, our worldwide revenue was $52.6 million, representing over 11% growth. In the U.S., revenue was $49.3 million, reflecting approximately 10% growth. International revenue for the quarter was $3.3 million, representing an impressive 34% growth.

Our two-year stacked worldwide and U.S. revenue growth of 18% highlights the durability of demand for our solutions. Importantly, this growth was delivered with strong operating discipline. Our operating expenses grew just over 4%, significantly below revenue growth, reflecting nearly 2.5 times operating leverage. This demonstrates our ability to drive growth while progressing towards sustained profitability and cash flow generation. Before I provide an update on our strategic priorities, let me provide insight into the recently announced reimbursement proposal that will positively impact our spinal pelvic market opportunity with Granite, if finalized as proposed. As you may recall, last year we requested that CMS assign pelvic fixation procedures incorporating Granite to a higher severity level within existing DRGs.

Based on analysis of the complexity and cost profile of these procedures, CMS has instead proposed creation of new DRG families for supporting extensive or complex spinal fusion procedures, including those that incorporate Granite. We appreciate the acknowledgment by CMS of the higher procedure complexity in cases where Granite is used. Overall, we believe the proposal more appropriately aligns reimbursement with the cost of these procedures. The increase in the average hospital payment under the proposed new DRGs could be as high as $50 thousand per procedure, depending upon specifics of the patient's diagnosis and severity. This reimbursement change would be effective October 1, 2026.

We believe this incremental reimbursement would support continued adoption of our differentiated technology and ensure patients, surgeons, and hospitals maintain long-term access to Granite. It will remove cost as a potential objection and further substantiate Granite as the standard of care in spinal pelvic procedures. Taken together, we made significant progress toward building a durable growth engine with record physician engagement, a broadening procedural footprint, expanding commercial scale, and a favorable reimbursement backdrop. This gives us confidence that we are positioned to accelerate our revenue growth going forward. Now I will highlight the progress we have made on our four key priorities: innovation and market development, physician engagement, commercial execution, and operational excellence.

Starting with innovation and market development, we are a category leader in developing and commercializing differentiated procedural solutions for patients with compromised bone. To date, our focus on the sacroiliac joint across three distinct disease states has resulted in nearly 150 thousand procedures and has established our deep competencies around enabling fixation and fusion of low-density bone. We are now leveraging this biomechanical leadership and our proprietary technology to expand beyond the sacroiliac joint into high-value clinical adjacencies in musculoskeletal care, with a focus on patients with compromised, often osteoporotic, bone. With nearly 300 thousand annual target procedures, fixation and fusion to treat SI joint dysfunction remains our largest opportunity. As we know, the sacrum has relatively low-density bone.

We are the undisputed leader, with multiple RCTs that demonstrate the effectiveness of our technologies in treating this disease state. We have the most comprehensive platform that includes technologies and placement trajectories to address patient concerns and physician preferences across all sites of service. The recent launch of Intra TI, our 3D titanium solution, further extends our leadership by combining the clinical benefits of metal implants with the speed and simplicity of what we call our Intra, or posterior-approach-based, workflow. Our Intra platform is a crucial enabler of our strategy to drive strong adoption among our fast-growing base of interventionalists and accelerate our penetration in the ASC and OBL sites of care.

With the ongoing migration of procedures to these settings of care, we see a significant untapped market opportunity and a long runway for sustained growth. Spinal pelvic fusion is our fastest-scaling market. As life spans increase, we expect a rise in spinal pelvic procedures for patients with bone-compromising conditions like osteoporosis or osteopenia. Building on the success of Granite, we are leveraging our expertise to develop targeted and competitively differentiated solutions that will complement Granite and address other areas of procedural failures, thereby improving outcomes for this growing patient population. Since the launch of Granite, our spinal pelvic revenue growth has meaningfully outpaced the broader deformity market growth rate, supported by strong physician adoption and compelling clinical outcomes.

The superiority of Granite was reaffirmed in the 160-patient POLA study published in March. The study demonstrated zero Granite breakage or pullout while delivering clinically meaningful improvements in both pain and disability scores at 12 months. Granite benefits from favorable reimbursement dynamics, including the existing transitional pass-through with zero device offset in the outpatient ASC settings. The new DRGs proposed by CMS also reinforce Granite’s economic attractiveness in inpatient settings by providing enduring reimbursement for our hospital customers and providing a framework for our commercial payers to follow suit.

With nearly 130 thousand target procedures, intuitive surgeon workflow, superior clinical outcomes, and highly supportive reimbursement, we believe that Granite, as well as our future platform technologies, can potentially make the spinal pelvic fusion market our largest revenue contributor in the coming years. In pelvic trauma, the majority of our approximately 60 thousand target procedures are to treat low-intensity sacral insufficiency fractures. Our iFuse TORQ/TNT system is well aligned with existing surgeon workflows, benefits from favorable reimbursement including NTAP of over $4 thousand, and is supported by our strategic partnership with Smith & Nephew. With the strong reception for TNT in Europe, we expect the pelvic trauma market to be an attractive contributor to global growth.

Finally, our multi-year pipeline is advancing ahead of plan, reinforcing our position as an innovation leader. Our third Breakthrough Device is advancing on schedule; verification and validation are nearing completion, and we are targeting a 510(k) submission in early third quarter. We have clear line of sight to a commercial launch, which we expect to meaningfully expand our total addressable market, deepen engagement with our spine surgeons, and represent a significant new revenue driver over the next several years. This technology addresses a significant unmet need in spine surgery and is designed to deepen our platform's utility in procedures our surgeons are already performing. Now let us move on to physician engagement.

We had over 1,650 active physicians in the quarter, representing more than 17% growth. This extends our track record of another quarter of double-digit growth across all call points, including spine, interventional, and trauma. Our expanding platform positions us to build cross-procedure relationships and increase the number of procedures performed per physician. In the first quarter, physicians active in the current quarter and prior year grew faster than the overall base, reinforcing our ability to retain physician engagement while expanding their use of our platform. These physicians generate three times the case volume of new users, reinforcing the value of long-term deep engagement. We are also seeing continued progress in cross-procedure adoption.

The number of physicians performing more than one procedure type increased 10% in the quarter compared to the prior-year period. Today, only 25% of physicians performing SI joint fusion utilize our platform across additional indications, highlighting a significant opportunity to expand within our existing base. With 89 quota-carrying territory managers, annual revenue per territory was $2.2 million, reflecting 11% year-over-year growth. This marked the 14th consecutive quarter of double-digit territory productivity growth. Our hybrid sales model, which is comprised of territory managers, territory representatives, and over 300 third-party agents, continues to be a competitive advantage. It has been particularly effective in expanding the reach of our direct sales force, especially in the spinal pelvic and pelvic trauma markets.

Our territory managers are considered clinical experts and thought leaders, and the hybrid approach allows them to prioritize engagement activities and maximize their impact in the field. With Smith & Nephew, we completed the first phase of field rollout in April and expect training and surgical capacity rollout to be substantially complete by the end of the second quarter. We anticipate revenue contribution to begin building in the third quarter and accelerate into the fourth quarter. This is consistent with how trauma volume seasonally concentrates in the back half of the year. While it is still early, the initial physician and field reception has been encouraging, and we will provide more specific updates as the partnership matures.

Finally, we remain on track to expand to approximately 100 territories over the next 12 months, aligning our commercial capacity with our strategy to bring several unique platform technologies to market in the coming year. Before I turn the call over to Anshul, I want to thank our employees for their continued focus and execution. We have built one of the fastest-growing, differentiated technology platforms with deep expertise in addressing the needs of patients with compromised bone. That focus continues to guide our innovation and expansion into new indications that will improve the lives of hundreds of thousands of patients over the next several years.

The fundamentals of this business across physician engagement, commercial productivity, and a broadening innovation pipeline give us real confidence in the trajectory ahead. Anshul will now take you through the fourth priority of operational excellence, as well as provide financial details and our updated guidance which reflects that confidence.

Anshul Maheshwari: Thanks, Laura. Good afternoon, everyone. My comments today will focus on first-quarter revenue growth, profitability, and liquidity. All comparisons are versus the same period in the prior year unless noted otherwise. Starting with revenue, our worldwide revenue was $52.6 million, representing growth of 11.2%. U.S. revenue was $49.3 million, increasing 10% even with the stronger prior-year comparison that benefited from three product launches. The first-quarter performance was modestly impacted by weather-related disruptions early in the quarter and our decision to deliberately pace trauma distributor onboarding while finalizing the Smith & Nephew partnership. Revenue momentum accelerated as the quarter progressed, driven by expanding adoption of our portfolio by a record number of physicians across all sites of service.

International revenue was $3.3 million, increasing 33.9%, reflecting accelerating demand for iFuse TORQ across Europe and Australia. This trend, combined with the early enthusiasm for TNT in Europe, reinforces our confidence in the significant long-term opportunity across our international markets. Moving to profitability, our gross profit was $41.9 million, an increase of $4.2 million, or 11.3%. Our gross margin for the quarter was flat year over year at 79.8% and remains among the best in the industry. Better-than-anticipated ASP from a favorable procedure mix, alongside the sustained impact of our operational efficiency initiatives, contributed to the strong gross margins in the quarter. Operating expenses were $47.0 million, representing 4.1% growth.

The modest increase was driven by higher commissions tied to revenue growth, as well as targeted investments in training, marketing to support the Intra TI launch, and ongoing investment in the product pipeline. The combination of strong revenue growth and operating discipline continues to drive meaningful operating leverage in the business. Our net loss narrowed to $4.3 million, or $0.10 per diluted share, compared to a net loss of $6.5 million, or $0.15 per diluted share, representing strong year-over-year progress. Adjusted EBITDA was $2.5 million in the quarter, representing over 440% improvement compared to $0.5 million in 2025. We are pleased with the expanding profitability even as we prioritize investments in innovation and commercial expansion.

Turning to liquidity, we exited the quarter with $144.7 million in cash and marketable securities, providing us with significant financial flexibility. Free cash flow in the first quarter was negative $3.4 million, representing a 50.7% improvement compared to the prior-year period. As a reminder, first-quarter cash usage reflects the seasonal impact of fourth-quarter commission true-ups and annual bonus payouts. We do expect higher-than-normal cash flow variability in the second and third quarters driven by the timing of payments from buildout of our new headquarters, which is expected in the second quarter, and the timing of tenant-improvement allowance reimbursements. Our balance sheet, combined with the progress towards free cash flow breakeven, positions us well to both invest and scale profitably.

We have the liquidity to accelerate R&D investments and expand the commercial infrastructure to support multiple product launches over the next five years. Now turning to our updated outlook for 2026. We are increasing our full-year revenue guidance to a range of $230 million to $233 million. The updated guidance implies year-over-year growth of approximately 14% to 16%. We expect quarterly year-over-year revenue growth to accelerate as we progress through the year, driven by the impact of the strategic innovation, commercial expansion, and geographic initiatives we highlighted today. We are still in the early stages of realizing the full benefit of these efforts, which we believe could represent a meaningful source of potential outperformance in 2026 and going into 2027.

As their impact increases, we will appropriately reflect that upside in our guidance. We are also raising our annual gross margin expectations to approximately 79%, up 100 basis points from our prior guidance. This reflects the favorable procedure mix and the sustained impact of our operational efficiency initiatives. Taken together, both raises reinforce our conviction that the business is performing at a high level and that our path to expanding profitability is on track. We expect full-year operating expenses to grow approximately 12.5% at the midpoint of our revenue guidance. We believe this disciplined investment will further strengthen our competitive position and facilitate sustained long-term growth. With that, I will turn the call back to Laura.

Laura Francis: Thanks, Anshul. Before we go to Q&A, let me leave you with a few proof points that define our execution track record: 20 consecutive quarters of double-digit physician growth and a record 1,650 active physicians in the first quarter; 14 consecutive quarters of double-digit territory productivity growth; improving profitability and free cash flow trajectory; guidance raised after the first quarter with revenue growth accelerating as we progress through the year; and a third Breakthrough Device on track for launch in the fourth quarter. We have built something durable and scalable here, and we are excited about what comes next. With that, we will now open the call for questions.

Operator: To ask a question, please press 1-1 on your telephone and wait for your name to be announced. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Our first question comes from Matthew O'Brien with Piper Sandler. Your line is open.

Matthew O'Brien: Afternoon. Thanks for taking the questions. Just Anshul, can you quantify the weather impact in the quarter? And then I guess the top end of the guide was only raised by $0.5 million. The bottom end came up by $1 million. Why not take it up a little bit more? Is there anything to read into that? And then I do have a follow-up.

Anshul Maheshwari: Hey, Matt. Happy to take that. We are really pleased with how the business performed in the quarter. We saw, as I said in my prepared remarks, acceleration in revenue as we progressed through the quarter, and that trend continued into April, so very encouraged there. In terms of the weather-related impact in January, I would say it is circa the half-million-dollar range, but a lot of that gets recaptured. If you go back in time, even during the pandemic or other disruptions, it generally takes about 60 days or so for those procedures to get rescheduled. So I would say the impact for the quarter was pretty muted; it was just timing between month one and later.

In terms of our guidance, we raised the lower end of the guide by $1.5 million and the upper end by $0.5 million, so the midpoint is going up about $1 million. That is consistent with our disciplined approach to guidance, especially this early in the year. Laura highlighted several initiatives we have been focused on in Q1, and we know there is potential upside, especially when you think about the opportunity for our Intra TI product as we expand into interventional, the potential for the Smith & Nephew partnership as it gets seasoned in the back half of the year, and then you have tailwinds around the potential higher DRG reimbursement that could go into effect on October 1.

That could be a nice tailwind for our Granite business, which has been scaling really well. Then you have the third BDD product that we will launch in the fourth quarter. There are a lot of tailwinds, but given that we are early in the year and many are still preliminary, we want to grow into those and then reflect upside in updated guidance as we go through the year.

Matthew O'Brien: Got it. Appreciate that. And then, Laura, thanks for the update on the new product that is coming out relatively soon that has Breakthrough Device designation. You said Q3 510(k) filing. Is it too aggressive to think that we may be able to see that at NASS this year or launch it, or should we really expect more of a launch in 2027?

Laura Francis: Thanks, Matt. We said we will have a filing in early third quarter and expect the product to launch sometime in the fourth quarter based on that timing. As soon as we have a product, we will bring it to various conferences. NASS may be a little bit early in the year for us to talk about it, but we are very excited. It is our third Breakthrough Device, and we believe we are addressing a large unmet clinical need with our spine surgeons. We also think it will provide a strong opportunity to increase surgeon density.

Last year, we had over 2,400 physicians who did at least one case with us, so we have a very significant customer base to utilize that product. We believe it may be used in the same cases as Granite as well, and given the new DRGs and that product being used in those cases, it provides an opportunity not just to open up new TAM for us, but also to increase surgeon density in a significant way. As soon as we have a clearance, you are going to know about it, and you are going to see the product. We are incredibly excited about what it can bring to us late this year and into 2027.

Operator: Thank you. Our next question comes from Young Lee with Jefferies. Your line is open.

Young Lee: Thanks for taking my questions. There is a lot of momentum in the business with a new product launching, reimbursement tailwinds, and adding new territories. Can 2027 growth be higher than 2026 growth, or your exit rate growth?

Anshul Maheshwari: Young, thanks for that question. Even thinking about how we set expectations for the rest of 2026, we do believe there is potential for significant upside as those tailwinds start having a more meaningful impact as we progress through the year. That is embedded in our statement around year-over-year growth acceleration in each of the subsequent quarters. In terms of exit growth rates into 2027, as revenue growth accelerates, that should be a nice off-ramp. I will not provide a specific 2027 outlook, but let me add quantitative color on the secular tailwinds that extend beyond 2026. Within SI joint fusion, our interventional strategy is in the early innings.

With the increase in reimbursement for OBL, our Intra product family is doing really well, and Intra TI just launched; adoption is ramping and should only accelerate going into 2027. On pelvic fixation, Granite has scaled up really well. With potential new DRGs going into effect on October 1, you will have an impact in Q4 and a more pronounced impact next year. Layer on the new product Laura just discussed; it provides an opportunity for higher procedure ASP because that product alongside Granite can go into the same case. In pelvic trauma with Smith & Nephew, as the relationship matures, we will continue to put surgical capacity out there in 2027 across Level 1 and Level 2 trauma sites.

Internationally, TNT was commercialized in Europe roughly nine months ahead of schedule, and as it seasons, that will be a tailwind too. So, there are a lot of positive long-term secular tailwinds that extend into 2027. Consistent with our approach, we want to execute through 2026, grow into those tailwinds, and then articulate what the exit ramp translates into for 2027 growth.

Young Lee: Very helpful. And on revenue per territory manager, still solid double-digit growth. Where can that grow to, and does it cap out, especially with the Smith & Nephew contributions and the new territories you are adding?

Laura Francis: You are right. We have continued to see productivity gains; over three years we have roughly doubled sales rep productivity. Our hybrid model has been a big driver—89 quota-carrying territory managers supported by more junior territory reps and over 300 third-party agents. The $2.2 million per territory is not the cap. Our largest territories are more than double that, and we use those as best-practice examples. We do plan to get to nearly 100 territories over the next 12 months to capitalize on current demand and upcoming launches in 2026 and into 2027. Growth is not solely dependent on territory count.

The ramp with Smith & Nephew should provide opportunity specifically in trauma while allowing our sales reps to focus on spine and interventional. Overall, we aim to continue driving growth and penetration with current and new customers while maintaining operating leverage.

Operator: Thank you. Our next question comes from Matt Plagman with TD Cowen. Your line is open.

Analyst: Hi, Laura and Anshul. It is Drew on for Matt tonight. Laura, you said the spinal pelvic fusion market could be your largest contributor over the next few years. Do you need the third BDD device to drive the bulk of that, or is there more in the pipeline? And can you help size Granite revenue today so we can better appreciate the opportunity?

Laura Francis: Thanks, Drew. We are excited about spinal pelvic. We worked with over 2,400 physicians last year, most of those spine surgeons, and more are doing Granite procedures. Our comment that this could be our largest market considers continued Granite growth, especially supported by the proposed new DRGs effective in October that should remove cost as an objection and support Granite as standard of care. The third Breakthrough Device is also targeted to spine surgeons, falls into the spinal pelvic category, and may be used in the same cases as Granite.

It provides an opportunity to engage new physicians and significantly increase density with existing physicians, either on its own or in combination with Granite, which would increase ASP for those cases.

Anshul Maheshwari: I would add we have a very active R&D pipeline. We want a regular cadence of launches focused on large unmet markets that are synergistic at both the procedure and call point levels. That gives us confidence—not just these two products, but others in the hopper. We will talk more as we get closer to FDA submissions or clearances.

Analyst: Got it. And Anshul, on capital spending: Q1 looked like the lowest CapEx in several quarters. How do we balance that with your commentary about putting more surgical capacity in the field for Smith & Nephew and product launches this year and next?

Anshul Maheshwari: Good question. For run-rate CapEx related to instrument trays and surgical capacity, think roughly $9 million to $10 million per year when you are launching products; we have generally been in the $8 million to $10 million range. Offsets include driving higher utilization of existing capacity and leveraging our launch experience to lower cost per tray for new products. We are also building our new headquarters on an eight-year lease; there will be a bit of one-time spend between Q2 and Q3, though some of that will be reimbursed via tenant-improvement allowances. Even with these investments, we feel very good about our target to reach free cash flow breakeven.

Operator: Thank you. Our next question comes from Travis Steed with Bank of America Securities. Your line is open.

Travis Steed: Maybe ask a bit more about the Smith & Nephew partnership—how that is ramping—and any way to think about the quantitative contribution to growth in 2026 and assumptions in the guide raise?

Laura Francis: Thanks for the question. We are really excited about the Smith & Nephew partnership. It covers Level 1 and Level 2 trauma centers and allows trauma surgeons access to our TNT product as well as TORQ to treat sacral insufficiency fractures. We had the Smith & Nephew trauma leadership team at our offices last week; the excitement and commitment are clear both in the field and with physicians. TNT is very synergistic with their portfolio. We are completing rep training, and the rollout should be complete by the end of the second quarter. Given a normal ramp timeline—typically a few months between training and first case—we should start to see revenue contribution in the second half, building into Q4.

As to opportunity size, the TAM is around 60 thousand patients and approximately $300 million per year. We will provide more as the relationship develops and incorporate into guidance as we see momentum.

Travis Steed: Great. Quick follow-up: what are you seeing in the second quarter already in terms of procedure volumes or trends in the spine market?

Anshul Maheshwari: We are not providing specific intra-quarter commentary. We noted acceleration as we progressed through Q1 and the trend we saw in April. We think about our business on an annual and multi-year basis because many tailwinds are secular and play out over years. That confidence is reflected in our guidance.

Operator: Thank you. Our next question comes from Caitlin Roberts with Canaccord Genuity. Your line is open.

Caitlin Roberts: Hi, thanks for taking the questions, and congrats. On Europe and the U.S., TNT launched earlier than expected in Europe, and TORQ launched in Australia. Do these change OUS growth expectations for this year?

Anshul Maheshwari: Happy to take that. International performed really well—both in Q4, the first full quarter of TORQ in Europe, and in Q1 with TORQ and the early commercialization of TORQ in Australia and TNT in broader Europe. It is still about 5% to 6% of our business, but it is tracking well. Given we are in early launch stages, we want to be thoughtful about scaling before incorporating significant upside. We are confident Europe, with these new products plus the strength of our SI joint business with Triangle, should be accretive to worldwide growth, which it has not been for the last few years. We also are evaluating other international markets showing physician interest to deploy TNT, TORQ, and potentially Granite.

Caitlin Roberts: And on the Smith & Nephew partnership, Smith & Nephew has its own U.S. priorities this year. Any risk the ramp for you is slower given their focus, or are these areas separate?

Laura Francis: For the most part, these are separate. We are working specifically with the trauma team at Smith & Nephew, and the products are very synergistic. They are focusing on the pelvis later this year, and TNT/TORQ support that. The product has Breakthrough Device designation, NTAP of over $4 thousand, and a typical ASP significantly higher than much of their portfolio—all favorable for uptake. We are working through training, deploying assets into the field, and hospital approvals. We feel Smith & Nephew will be a great partner and are seeing that commitment.

Operator: Thank you. Our next question comes from David Saxon with Needham & Company. Your line is open.

David Saxon: Good afternoon, Laura and Anshul, and congrats on the quarter. On the path to 100 territories over the next year—that would be the fastest pace of hiring since 2021. What is the confidence in getting there, and how important is it in the context of the upcoming BDD launch?

Laura Francis: Since 2021, much of our sales force expansion has leveraged our hybrid model. We grew from a small number of third-party agents to over 300 today, driving significant operating leverage. The Smith & Nephew relationship is another element of that strategy. Expanding to nearly 100 territories over the next 12 months is important to prepare for the next Breakthrough Device launch that we believe will attract additional surgeons and increase surgeon density. We had a record 1,650 active physicians in Q1 with 17% growth, and unlike typical seasonality between Q4 and Q1, we did not see a fallback.

We have a tremendous asset in our customer base, and this product will help meet their needs across SI joint fusion, pelvic fixation, and the new indication we are targeting.

Anshul Maheshwari: To build on that, if you look back to 2021, once we built out the salesforce, it was quickly followed by four launches—TORQ, Granite, TNT, and the Intra family—and growth inflected to roughly 22% CAGR from 2021 to 2025. You are seeing a similar playbook now at a larger scale, anticipating an aggressive innovation cycle over the next five years, with continued operating scale and leverage.

David Saxon: Great. And on margins—really strong performance in Q1. What is driving that: leverage on higher revenue, or anything operational? And what is the latest pricing assumption in guidance?

Anshul Maheshwari: We are pleased with gross margins at 79.8%, nearly 80%, which are industry-leading and ahead of expectations. That is why we increased full-year guidance for gross margin by 100 basis points to approximately 79%. Drivers include better-than-expected procedure mix and ASP, plus incremental impact from supply chain efficiencies and cost optimization initiatives. As we launch new products and roll out additional surgical capacity to support Smith & Nephew, we do expect some non-cash depreciation on instrument trays in the back half, which is incorporated in the 79% full-year outlook. On ASP, we started the year assuming mid-single-digit ASP decline but have done better, with Granite a big contributor due to more four-implant cases than initially guided.

We are now assuming low-single-digit ASP degradation. We think we could do better, but interventional (Intra family) generally uses fewer implants, and trauma might use one to two implants per procedure, which we embed as ASP pressure. We are not incorporating additional upside from Granite continuing to see more four-implant cases or from the continued strength in SI joint where you use three implants.

Operator: Our next question comes from David Turkaly with Citizens. Your line is open.

David Turkaly: Hey, good evening. Quickly, Anshul, you mentioned the headquarters—did you put a dollar amount on that? And from a capital allocation standpoint, you have a lot of cash; what are your priorities, and has a buyback ever been considered?

Anshul Maheshwari: On CapEx, as noted, instrument tray and surgical capacity is around $9 million to $10 million for the year, and then you have another $4 million-plus on CapEx for the new headquarters. Some of that will be reimbursed as part of the TI allowance; timing is TBD based on the contract. On capital allocation, our focus remains on investing in R&D and new product innovation, clinical data to support the growing number of products we plan to commercialize, associated surgical capacity, and building commercial infrastructure to support growth. We like how the business is positioned with growth in gross margin dollars and continued operating leverage inflection, but our priority remains growth-accretive investments within the business.

Operator: Thank you. Our next question comes from Richard Newitter with Tru Securities. Your line is open.

Analyst: Hi, thanks for taking the questions. On the cadence of the revenue guide—you expect acceleration through the year. Consensus is around 15% to 16% for Q2 or about $55 million, implying roughly 2.5% acceleration through the year. Is that about right, and can you comment on that cadence or the Q2 number at all? And you maintained OpEx growth guidance; you are coming out of the gates at almost 3x your top-line growth versus your OpEx growth. What is behind that? Are expenses being pushed out, or is that conservatism?

Anshul Maheshwari: As you know, we do not provide quarterly guidance and manage the business on a full-year, multi-year basis. We do expect year-over-year growth to accelerate, more pronounced in the second half. Part of that is the timing of scaling in interventional and the Smith & Nephew partnership, where we expect a meaningful contribution in Q3 and Q4. You might see some timing shift between Q2 and Q3 mostly because of Smith & Nephew. For the year, we feel good about growth and, importantly, the exit ramp from Q4 into 2027. On spend, we like the operating leverage we saw. At our scale, timing can have a big impact.

In Q2 and Q3, we are in the midst of V&V testing and regulatory submissions, plus marketing activities for Intra TI and the new product for Q4 commercialization. You will see a bulk of that spend there. We are also embedding R&D spend that will impact 2027 launches. There could be upside on operating leverage, but we prefer to be conservative, incorporate the spend, and let growth speak for itself as we progress through the year.

Analyst: That is helpful. And on the DRG proposal tailwind, this seems like a really big potential benefit. Is this the outcome you expected, and why would this not be an enormous tailwind next year?

Laura Francis: Great question. We believe this is a very significant and underappreciated tailwind. Granite has been one of our fastest-scaling products, addressing fixation failure in multilevel constructs with compelling clinical data. It should become the standard of care in roughly 130 thousand cases per year in the U.S. The inpatient rule proposes a new DRG group for complex and extensive spine surgeries. Under the proposal, Granite is one of only two technologies for which those procedures automatically map to the new DRG. The proposal is significantly better than what we requested. We had been in discussions with CMS for two years, initially requesting reassignment of Granite cases to higher severity levels within existing DRGs.

CMS concluded that would not fully address cost differentials and instead created a new DRG family. The improvement in hospital payment under the proposed new DRG could be as high as $50 thousand, depending on diagnosis and severity. These new DRGs are more durable than NTAP and not limited to Medicare; if finalized, we expect commercial payers to broadly adopt them alongside CMS. We strongly believe the new DRGs will positively impact the spinal pelvic market opportunity for Granite, assuming finalized as proposed, supporting adoption and removing cost as a potential objection.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Laura Francis for closing remarks.

Laura Francis: Thank you to everyone for participating in today's call. We appreciate your interest in SI-BONE, Inc., and we look forward to seeing you at upcoming conferences as well as on non-deal roadshows. Goodbye.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.