SI-BONE, Inc. (NASDAQ:SIBN) Q2 2023 Earnings Call Transcript

Anshul Maheshwari : Thanks for the question. In terms of the operating leverage, we’re really pleased with the trajectory that we’ve demonstrated in operating leverage, it’s been pretty linear to our top line growth. And it’s basically driven by the foundation that we’ve built in making investments that we knew was required to support the level of growth acceleration we’re seeing in the business. Now, in terms of how we see that evolve, we do believe that fiscal year 2023, we will continue to see operating leverage, albeit the year-over-year comps to become a bit tougher. And you are seeing that in last year as well. But we feel good about that. And we’re not going to be giving up guidance on when we believe we get to breakeven from an adjusted EBITDA or cash flow perspective.

But if you look at the trajectory that we’ve been on, and extrapolate where revenue has been, and is potentially going to go, when we provide 2024 guidance and beyond, we’ll be able to share more.

Andrew Ranieri: Fair enough. And maybe second, on just the Granite instrument trays, I understand that you’re continuing to roll this out. And part of the recent raise was to kind of build up the inventory here. But for the centers that you’re in today, can you maybe just talk to us about what you’re seeing in terms of utilization or productivity. You kind of hinted at some details, but any more clarity around what you’re seeing kind of the early days of these accounts would be great, thank you.

Laura Francis : Thanks Drew, on granite trays, the granite launch really has been trying to supply in order to meet the demand. And I talked in my prepared remarks about the efforts of our team in order to hit the results that we’ve hit. And this is a particular area that I would say that people have gone above and beyond here. So our operations team trying to supply the implants that are needed, the trays that are needed, and then the people in the field trying to utilize the trays that they have, it has not been unusual for our sales reps to have to drive hours in order to retrieve trays and actually go to another site. And so what we think we’re doing here in the second quarter, and in the third quarter, is making sure that we have the inventory that we need, especially for granite, as well as the trays that we really need particularly going into the seasonally high volume fourth quarter that’s coming here.

And we feel very confident that we’re in that position. But it really has been around 12 months of a lot of work in order to make sure to meet the demands that our surgeons are providing.

Operator: Our next question will come from the line of David Saxon of Needham & Company.

Unidentified Analyst: Hello, this is Joseph on for David. Maybe a high level question. Looking at 2024, Anshul, I know you said it was maybe a little early to comment on it, but maybe some high level details, you’ll be facing much more difficult comps in 2024, but you also be farther along with the Granite and TORQ rollouts. And the assumption that you have shorter comps for Granite launch, they’re going well, but just wanted to hear how you guys are feeling about sustaining that 20 plus growth, even if you start lapping those tougher comps.

Anshul Maheshwari : Yes, Joseph, Thanks for the question. And, look, I think our execution over the last several quarters give us a lot of confidence in the underlying momentum in the business, the foundation of which is built on our differentiated portfolio, which as you highlighted is that the next family of granite products that we will launch next year, the favorable reimbursement both within the SI joint fusion side of the business, as well as the end cap on granite. And just the improving operating leverage tried to, we are set it really well. And we do believe we’re in the early innings of delivering on our long term growth strategy that we’ve laid out over the last couple of years, and have all the ingredients in place to deliver strong and sustainable as well as fiscally responsible growth.