Good afternoon. Welcome to the Establishment Lab's fourth quarter 2025 earnings call. At this time, our participants will be in a listen-only mode. At the end of the call, we will open the line for question and answer session, and instructions will follow at that time. As a reminder, today's call is being recorded. I will now turn the call over to Raj Dinhoy, Chief Financial Officer. Please go ahead, sir.

Thank you, Operator, and thank you, everyone, for joining us. With me today is Peter Caldini, our Chief Executive Officer. Following our prepared remarks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meeting of federal securities laws. These include statements on Establishment Lab's financial outlook and the company's plans and timing for product development and sales. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. For discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent annual and quarterly reports on Form 10-K and Form 10-Q, as well as other SEC filings which are available on our website at establishmentlabs.com. I'd also like to remind you that our comments may include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which can be stated on a constant currency basis, or EBITDA, which we disclose on an adjusted EBITDA basis. Reconciliations to comparable GAAP financial measures for non-GAAP measures, if available, may be found in today's press release, which is available on our website. The content of this conference call contains time-sensitive information accurate only as of the date of this live broadcast, February 24, 2026. Except as required by law, Establish Labs undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn the call over to Peter.

Good morning, and thank you all for joining us today. Q4 2025 was another standout quarter for Establishment Labs. Fourth quarter revenue was $64.6 million, an increase of 45.2% versus Q4 2024, including Motiva revenue in the U.S. of $17.3 million. This brings our 2025 total revenue of $211.1 million, an increase of 27.2% over 2024. U.S. Motivo revenue in 2025 was $45.6 million, a number that I'm sure significantly exceeded everyone's expectations. As our business scaled, the operational leverage that we've been talking about is coming into focus. Q4 had a succeeding 70% gross margin for the second consecutive quarter, and our margins will continue to improve. Our fourth quarter net loss from operations was $3.9 million, down 79% from Q4 2024. Our Q4 adjusted EBITDA was positive $5.5 million, up from the negative 13.1 million we reported in Q4 2024. This trend should continue throughout 2026, culminating in our first positive cash flow quarter this year. In 2027, we expect to be cash flow positive for the entire year, and our margins should improve for years after that. With this trajectory and our ending cash balance is $75.6 million in 2025, we have no need for additional capital. As noted at the JPMorgan Healthcare Conference, we are comfortable not only setting guidance for 2026, but also providing some visibility in 2027. As such, we are giving guidance for 2026 of $264 to $266 million, and there may be some upsides to these numbers. At a minimum, this is a 25% growth, and we believe that 2027, we will see at least this level of growth as well. Q4 capped off a remarkable 2025 for Establishment Labs. We didn't just see the U.S. market for growth in the years to come. We established ourselves as the company transforming the industry, materially changing and increasing the conversation about breast aesthetics. The $45.6 million in U.S. revenue and approximate 20% augmentation market share exiting 2025, is something that took the last new entrant almost 10 years to achieve, and we did it in one. How do we accomplish this? Well, first off, there's been a complete lack of innovation in breast aesthetics for decades. We have had an active R&D pipeline since 2010, which continues today and is unparalleled in the industry. Our R&D investment continues to translate into highly differentiated products that address significant unmet needs in the market. When patients review or hear about the FDA study complication rates for today's commercially available implants, they recognize that Motiva should be part of the decision when selecting both a surgeon and an implant. Last week, surgeons tell us that when patients are presented with different implant options during consultation, 9 out of 10 choose Motiva, even at a higher price point. This isn't just about data for them. Patients are gravitating towards Motiva when they compare implants in their hands. When doctors dig into the science and data behind Motiva, they find rigorous scientific literature that details our technologies and why our implants are designed to create better patient outcomes. The process of consideration has been amplified and is actively discussed across social media. There is a new era of transparency that has evolved as women share their journey and talk openly about their aesthetic goals and decisions. An estimated 300,000 women get a primary breast augmentation every year in the United States, and it continues to be the number one aesthetic surgical procedure annually, but it has always been a secret shared quietly. Social media has created a new paradigm where aesthetic and beauty secrets have become normalized. We believe that the combination of our innovative products and this new era of transparency is creating meaningful market expansion, and we can already see the start of this trend. It is not just patients that are excited about Motiva. For the first time in a very long time, plastic surgeons have a product and a surgery to talk about. It's new, it's differentiated, and they are taking to social media to talk about it. Their excitement and passion for Motiva and what it means for breast augmentation comes through, and patients are responding. We are very thoughtful in how we spend our marketing dollars, and obviously, compared to some of our competitors, our resources are limited. But the marketing value we are receiving from patients and doctors is a competitive advantage and is very difficult to compete with. Our innovation and its reception in the market is driving adoption, and plastic surgeons report to us that many patients come in asking for Motiva by name, whereas prior to Motiva, they would really ask for a brand. All this has led to one of the fastest product launches in breast aesthetics history. The momentum has continued in the Q1 of 2026, with both January and the first two weeks of February exceeding our expectations. Since launch in late 2024, we have onboarded over 1,500 accounts. We continue to sign up new practices every day. January and February are peak conference months for plastic surgeons, and Motiva continues to dominate the podium discussions with surgeons actively seeking us out at these events to learn more and engage with us. It certainly appears our growth curve will continue. In a recent blinded survey of plastic surgeons, 88% said they either use or are interested in trying Motiva, with the top reasons including patient-driven demand, an unmatched safety profile, the benefits of smooth silk surface, and the opportunity for above the muscle placement. In the survey, 75% of surgeons noted they've been asked for an implant brand by name, and surgeons reported that 93% of the time that brand was Motiva. Patients actively seeking out Motiva is having a significant impact on account volumes. In that same survey, surgeons with greater than 50% Motiva share in their practices saw year-over-year growth in augmentation volumes that was more than double that of surgeons primarily using another brand. This is important because while many early adopters have moved the majority of their volume to Motiva and are seeing the benefits of this on their practice volumes, the opportunity to grow our share of procedures and accounts remains significant. This is not surprising given how clinic onboarding has ramped up over the year and because many surgeons plan and schedule surgeries months in advance. As we move through 2026, we expect to see our share in these accounts to move meaningfully higher. These efforts are being supported by a best-in-class commercial organization. In 2026, we plan to expand our U.S. sales force with the addition of up to 15 more sales representatives, a majority of whom have already been hired. This team of seasoned industry veterans are in plastic surgery accounts every day, pushing our share higher. 2025 was also the year we started to introduce the concept of minimally invasive breast augmentation through our early experience of Preservet. We had strong global demand and were confident that patients and doctors in the U.S. would be equally receptive. If Motiva implants alone were exciting in the U.S. market, what would that technology plus the promise of smaller incisions, minimal anesthesia, and fast recovery bring? The acceptance and demand outstripped even our own expectations. For decades, plastic surgeons contended these ideas were not important to patients. You just have to look at the social media response and know that patients feel very differently. We have two types of women choosing Preserve. The first are women that are already committed to the idea of breast augmentation, but are now choosing Preserve at a much higher price point because of the benefits over traditional augmentation. The second are women that were simply not interested in legacy breast augmentation procedure, but are now considering and booking surgery. For that second group, it may have been the aversion to general anesthesia, the fear of extended downtime that disrupts daily life, or a number of other factors. Regardless, they are now part of a whole new group of consumers considering the possibility for the first time. Of the organic leads that have come through the Preserve A section of our website pre-launch, 81% of patients looking to get connected with the surgeon said they are only interested in getting a breast augmentation if they can get Preserve A. This marks a meaningful paradigm shift in the industry with Motiva uniquely positioned as the only solution meeting evolving consumer interests. We charge about two times more for Preserve A than we do for traditional breast augmentation. Preserve A is not only expanding the market on a dollar basis, it's expanding procedure volumes as well. Based on our U.S. early experience, we are seeing expansion in the category. Approximately 15% of Preserve A patients in the U.S. reported they were not previously considering a breast augmentation prior to learning about the procedure. In March, we are moving from our early experience to a full launch. We have trained more than 90 surgeons, many of whom report patient wait lists and women traveling across the country to access the procedure. In a recent survey with consumers on Preserve, over 55% of patients considering breast augmentations indicated a willingness to pay a premium, and surgeons are currently charging 30% to 50% more than traditional augmentation. The average breast augmentation in America is about $9,000, and currently the average pricing for Preserve is more than twice that. This pricing reflects the value of a less invasive, tissue-preserving option with faster recovery and minimal anesthesia. We expect to have at least 200 plastic surgeons trained by the end of 2026. If you're doing diligence around the impact that Preserve is having, I suggest talking to surgeons that have performed a number of cases. At least five surgeons have already done more than 40 cases in geographies that span coast to coast. Surgeons cite the benefits of Preserve to patients, but also to their practices. One plastic surgeon told me recently that Preserve was game-changing. He used to have a local practice, occasionally regionally. Now he has patients flying in from all over America. Another plastic surgeon that methodically tracks her metrics reports that she's able to do three or four more operations per week with the time that Preserve saves her. Our minimally invasive surgery portfolio is a real win-win for all. Patients are getting access to benefits that are incredibly important to them. Surgeons are able to charge more per patient and do more surgeries at the same time. better experience for patients, and better businesses for surgeons. In December 2025, we also submitted Motiva implants to the FDA for approval in primary and revision breast reconstruction. Reconstruction represents a significant strategic opportunity as it effectively doubles our total addressable market in the United States while offering higher average selling prices. Motiva Flora Breast Tissue Expander is already in 200 facilities nationwide, and this footprint should continue to expand as we move closer to FDA approval. In addition, we remain active in communications with the FDA regarding our small size of submission, which will further expand our portfolio, meet a broader range of patient needs and allow us to take a higher percentage of cases by surgeons already using Motiva. Beyond these initiatives, MIA, Ergonomics 2, and GEM are also part of the innovation pipeline that we're working to bring to the U.S. market in the coming years. Along with our success in the U.S., our OUS performance remains strong and well-diversified. A major focus for us in 2025 was our direct markets, and we have seen very good results. The number of accounts in many of our direct markets continues to grow, underscoring the strength of demand. European direct markets delivered more than 20% growth for the third consecutive quarter, led by outstanding performances in the UK, Germany, and Spain. In Latin America, results have stabilized in Brazil, while Argentina continues to post strong growth. Additionally, our recent acquisition of Benelux exceeded our expectation in the first year. While distributor markets can fluctuate based on the timing of orders, we are seeing healthy demand globally. Across APAC, China remains a key focus, and we're actively working with the local distributor and seeing improved performance. Our minimally invasive platform, Preserve A and MIA, continues to demonstrate strong momentum outside the United States. Preserve A is now available in 33 global markets, with demand exceeding expectations and more than 700 accounts opened. MIA outperformed the $8 to $10 million guidance in 2025, and it has more than doubled the number of accounts compared to 2024. Notably, all MIA clinics have adopted Preserve, enabling them to offer the benefits of a less invasive augmentation solution to a wider range of patients at price points far greater than a traditional breast augmentation. Globally, we expect demand for a minimally invasive platform to exceed $30 million in 2026 and continue to be a key growth driver in years to come. As I'm sure you have noted, we issued a second press release this morning around the management transition we're making effective March 9th, which is really about getting establishment labs ready for our next phase of growth. Over the past several years, we have been focused on driving efficient execution and scalability. We are now adding additional leadership to sustain operational momentum while ensuring oversight of initiatives that require deep business expertise and strong leadership. With this, we are delighted to have Raj's transition into the role of SVP Global Strategy. His deep understanding of our business, strategic perspective, and broad industry experience will be instrumental. There are a number of initiatives underway that should keep us at a very high growth rate for the foreseeable future, and exactly how we execute these requires extensive planning and oversight. Along with this, we are pleased to welcome Cassandra Harris as our new Chief Financial Officer. Her strong background in operational excellence and proven track record of strengthening financial discipline while enabling growth will be critical as we execute on our priorities ahead. I will now turn the call over to Raj.

Thank you, Peter. Total revenue for the fourth quarter was $64.6 million, an increase of 45.2% from last year. Excluding the positive impact of foreign exchange in the quarter, growth would have been approximately 39.4%. Sales from Motiva in the United States were $17.3 million. On a geographic basis in the fourth quarter, sales in Europe, Middle East, and Africa were 41% of the global total. We saw strong growth in the region overall, including another good quarter in our direct markets where we exceeded 20%, as well as good demand from our distribution partners. Sales in the United States were 26.8% of the global total. Latin America was 18% of sales. Brazil remained stable, and we saw good growth in Argentina, our other direct market in the region, as well as from our distributors. Asia-Pacific was 14.1% of sales. The results in the quarter reflected the comp in the year-ago period where we saw sales to our Chinese distributor, as well as the normal ebbs and flows of distributor purchase timing. Gross profit for the fourth quarter was $45.5 million, or 70.5% of revenue. This was a 200 basis point increase compared to the 68.5% of revenue last year. Overall in 2025, our gross profit margin increased 330 basis points compared to 2024, primarily the result of the higher margin sales in the United States. SG&A expenses were $44.0 million and were flat compared to the fourth quarter of 2024. R&D expenses for the third quarter were $5.4 million. Total operating expenses for the fourth quarter were in line with the year-ago period at $49.5 million. Adjusted EBITDA was positive $5.5 million in the fourth quarter. This compared to a loss of $13.1 million in the fourth quarter of last year. This is our second consecutive quarter of positive adjusted EBITDA. The $18.6 million improvement year-over-year in adjusted EBITDA was driven by the strong sales and the higher gross profit in the United States. but we've also been very focused on managing our operating expenses overall. Over the course of 2025, we grew our U.S. commercial operations and we launched the second offering on our minimally invasive portfolio. We were able to do this and still generate increasing profitability by finding efficiencies across all parts of the organization and making structural changes when needed. Cash increased $4.9 million in the fourth quarter to $75.6 million. The increase was primarily the result of reduced operating cash use as well as inflows from option exercises. For 2026, our initial revenue guidance is for $264 million to $266 million, an increase of 25.1% to 26% over 2025. We expect our OUS business will grow in the single digits and the U.S. will exceed 30% of overall sales, which is up from approximately 22% in 2025. Gross margins are expected to increase 200 to 300 basis points. Operating expenses in total are expected to be approximately $195 to $200 million in 2026. However, as we saw in 2025, there can be some variability in quarterly spending levels based on the timing of expenses. We expect to be adjusted EBITDA positive every quarter in 2026. Cash use will continue to improve over the course of 2026. Our free cash use is expected to be less than half of what it was in 2025, and we expect to reach cash flow positive this year without the need for any further equity raises. Our credit facility will enter the last year of its term in April and we are considering a number of refinancing options. Overall, our financial outlook reflects a significant momentum in our business. The adoption of Motiv in the U.S. is still early with significant room to drive further practice adoption as well as penetration within accounts. Preservate will add to both procedure growth as well as our realized ASPs. Outside the U.S., global demand remains good and our focus on direct markets and our minimally invasive portfolio should lead to another solid year of results. Down the P&L, gross margins are benefiting from the positive geographic and product mix playing out. Even with continued investments, incremental operating spending over the next few years will be at a rate well below top-line growth. This leverage should allow us to achieve cash flow profitability in the second half of the year and is the basis of the meaningful and increasing earnings we expect to see in 2027 and beyond. We continue our work to make ESTA eligible for inclusion in a number of indices, including the Russell. Recent updates have increased our confidence that we will be included this year. Finally, as Peter mentioned, I am moving into a new role at Establishment Labs. With the company on good financial footing, Peter and I have been discussing the best way for us to realize the significant potential we have to create shareholder value. ESTA is in a very unique situation with unmatched innovation in products and a pipeline that even further distances us from our competitors. To realize this, effective execution is the key. The company has grown very organically over the past 20 years, and there are a number of areas that have the opportunity to be strengthened. After five years as CFO, I'm looking forward to a new challenge of leading our global strategy. In this new role, I will remain actively engaged in driving our performance, but the day-to-day finance function and CFO role will transition to Sandra Harris, who was selected after an extensive search. With that, I will turn the call back to Peter.

Thank you, Raj. While continuing to invest selectively, we are maintaining an investment pace well below the expected top-line growth. We expect to achieve free cash flow positive in 2026 with meaningful earnings beginning in 2027. I'd like to thank the entire organization for a great 2025. This year, we remain focused on disciplined execution and building a global category leader. operator we're ready to take your questions thank you we will now conduct a question and answer

session if you would like to ask a question please press star 1 on your telephone keypad as a reminder this conference being recorded a confirmation tone will indicate your line is in the question queue you may press star 2 to remove yourself from the queue for participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys Once again, that's star one to ask a question at this time. One moment while we pull for the first question. The first question comes from Josh Jennings with TD Cowan. Please proceed.

Hi, good morning. Thanks for taking the questions, and congratulations to a strong end of the year, and excited for you, Raj, and your new role. I was hoping to just start on the minimally invasive portfolio. I mean, it seems clear that Preserve and me are pulling patients off of the sidelines. A couple of years back, I think prior to your tenure, Peter, the team had kind of put forward the potential for the minimization portfolio to grow the market and grow breast augmentation procedure volumes, maybe even double them. But can you just, maybe not going to put that stake back in the ground, but can you just talk about the optimism and the trajectory of the market with minimization offerings from establishment coming through?

Yeah, thank you. Thank you, Josh. I mean, what we are seeing in the OUS markets with the minimally invasive platform from the early experience in the US is extremely positive. I think, you know, with the benefits of no general anesthesia, smaller scars, faster recovery, you know, I think that really resonates with patients. And we're seeing that in the marketplace and also with some of the surveys when we talk about 14% of patients that decide to do breast augmentation. We're not considering until they heard about Preserve, and that's in our early experience survey in the U.S. So it's a real driver for what we think is not only to drive share for us in the market, but also to bring new patients and new women into the category. So we're really seeing that benefit. And, you know, we think that that's going to continue to be a key driver. It's going to be a bigger part of our business as we go throughout this year, as well as next. And, you know, our estimate and what we put in terms of the guidance, over $30 million this year. And we feel very confident with that. So this will be a real driver for us this year, as well as into the future. Excellent. Maybe just one follow-up.

I appreciate you laying out U.S. revenues being roughly 30%. You are planning on adding reps around the 30% higher number. Let me just talk about where you're pulling these reps from. Are you still taking all-star veterans from the competition in the breast implant sector or the aesthetic sector? and just remind us of how the productivity can ramp for these new reps as they come on board over the course of 2026. Thanks for taking the question.

Yeah, thanks, Josh. I mean, I think one of the key drivers for our success in the U.S. market is, you know, we've been able to put together a best-in-class organization. You know, so if you couple that with what we believe is the best product from a performance and a safety profile and bringing together with the best-in-class organization. And we're very focused on the type of reps that we bring to establishment labs. And we are continuing to focus on reps that have significant industry experience, that have a very good reputation on the market, that have a very strong track record. And I think what's very positive for us is that a lot of these reps see us as very attractive opportunities. And that will continue to be a key driver for us in this year as well as into the future.

The next question comes from Mike Madsen with Needham & Company. Please proceed.

Yeah, thanks for taking my question. So just want to start with one on reconstruction in the U.S. So, you know, can you maybe just talk about how you plan to launch into that market when you do get the FDA approval? Do you need specialist reps? Do you need maybe like a corporate accounts type sales team? And maybe just talk about the importance of hospital contracts there.

Yeah, thanks, Mike. I mean, as you see and, you know, we've highlighted that the recon indication is a really large opportunity for us. I mean, it really doubles the market potential for us. And we've already kind of seeded the market with some of the – with Flora. We're in over 200 accounts. As we get closer to the launch, we will be expanding, obviously, expanding our sales force. We'll probably look at a combination of some reps that will be hybrid, and then we'll have some dedicated reps specifically for the larger hospital network. And, you know, I think that we need to make sure that we have the right coverage, right sales support to ensure that we really capitalize on that opportunity. And, you know, as I mentioned before, we've already gotten some seeding in terms with the floor. So I think the ramp up will be a little bit quicker. And, you know, I think, but as it relates to the sales force, we want to make sure we have some specific coverage, but we're also going to be leveraging the existing sales force.

Okay, got it. And then the international growth was a fair bit stronger this quarter. So was there any kind of one-offs in there, stocking orders, anything like that? Or is this truly reflective of the underlying procedure growth that you're seeing?

Yeah, I mean, I think, listen, this year we made a very strategic focus on driving our direct markets. and you know we've really been successful in terms of driving growth in those markets we've allocated resources from a supply as well as investment standpoint we made some organizational changes and you're seeing the benefits of that you know we've had 20% growth the last three quarters Preserve A is also helping to drive that as well as we increase the number of accounts but in general I would say that the demand across all our markets is fairly stable and you know in terms of how we finish the quarter you know I don't think there was any you know necessarily any stocking orders it's just sometimes what you'll find in the distributor markets there is a you know some you know different periods it's not always a straight line it's a little bit choppy in terms of that but you know there was no efforts in terms of you know any type of additional inventory or stocking it's just it's just really based on the demand that we're getting in the marketplace and it's also based on the good execution okay no i think that's that's

fair i mean it's uh as peter noted i mean it's there's always some ebbs and flows in the distributor markets in particular based upon the timing of orders but overall demand remains very healthy across all the regions and the direct markets which we control ourselves obviously are doing very well right now. We're executing at a high level. Okay, great.

Thanks, guys. The next question comes from Anthony Patron with Mizuho.

Please proceed. Thanks, and congrats on a strong year. Congrats, Raj, on the transition, and Cassandra, welcome to the team if you're on the call. So maybe just around the horn globally, I know the macro's come up quite a bit. It seems a little bit better maybe on a three-month to six-month basis here when you think of the regions, but maybe just a quick recap. Where do you see the underlying augmentation markets, U.S., and then some of the core OUS markets, thinking of Europe, China, Korea, and then I'll have a follow-up question.

Yeah, Anthony. If the question's really on the underlying markets, I mean, generally the markets feel healthy right now. The U.S., for us, we're growing at a high rate, so we're kind of well exceeding what's happening in the underlying market. But as we've noted, there does seem to be some increased interest in breast augmentation procedures. And I think a lot of that's been driven by the activities we're doing, certainly. But it does feel like the market in the U.S. is very healthy. And we hear that from surgeons as well with surgery schedules booked out and lots of interest. So overall, I'd say the U.S. remains quite healthy. Internationally, frankly, we're seeing the same thing. You know, in our distributor markets, you've seen north of 20 percent growth now for several quarters. You know, that's that, again, is pretty indicative of what's happening on the ground and also with our share taking. And then in distributor markets, likewise, you know, the demand seems to be quite good. You know, China, you mentioned, has been a market that we've highlighted as had some challenges. You know, it's taking a lot of focus of management in the company. We're spending a lot of time with that distributor. And frankly, we're seeing the results you know starting to turn a little bit and so um so so overall i'd say you know the markets remain healthy for us and and you can see it in the numbers that's helpful and a follow-up

would be on on just the establishment labs mix you know when you think of preservate here coming in uh and obviously good feedback but also reconstruction what do you think i guess Preserve can be as a percent of total revenues, you know, once we get into the sort of 27 to 28, you know, time range, you know, can it eventually be 50% of, let's say, U.S. revenues? And if that's the case, you know, what do you think the tailwind looks like to your gross margin? Thanks.

Yeah, I mean, Anthony, it is early still, right? So Preserve launched, you know, essentially a year ago in Brazil. It was February of 2025, right? And the demand we've seen has been very strong. You know, the U.S. globally, there's a lot of interest. It has really, I think, caught the attention of surgeons. You know, it fits into the way that they do surgery. You know, a number of them are saying, why would I do surgery any other way, frankly? And so your numbers of getting to 50%, you know, are not outside the realm of possibilities. I mean, I think we could see that kind of penetration. And to your point about what it does to our gross margins, you know, the ASPs we realize for a PreserveA case relative to a case that only uses the implants, it's about twice the revenue for us as a company, and they are much higher margins, so it is a tailwind to what you're going to see on the gross margin side. That combined with the ASPs in the U.S., what's going to happen with Recon, it just adds to a number of initiatives that are going to support the gross margins going significantly higher over time. Thanks. The next question

comes from Sam Eber with BTIG. Please proceed. Hi, good morning. Thanks for taking the questions

here. Maybe I can come back to the U.S. for just a second, and Peter, get your thoughts on some of the momentum you called out in the early days of 2026, and then I guess where you think you are along this growth trajectory. Is the long-term outlook for share gains still around the same

goalposts that you've laid out in the past. Yeah, thanks, Sam. You know, we continue to have very strong momentum going into 2026. You know, we, as I mentioned in the prepared remarks, there's a lot of opportunity to continue to gain share in the accounts that we're already in as we increase the utilization rate, as the surgeons work through their scheduling. we're also going to be continuing to add accounts so like put more accounts on the top of the funnel so that's going to be significant drivers for us as we mentioned also we're going to be adding up to 15 reps and a bulk of them have already been brought on we started that process thing we mentioned the last earnings call that we're going to start that process the end of last year so we've had close to 10 reps join the organization so far and we're going to continue to bring those reps. So that's going to be a key driver for us. Then you overlay the fact that we're going to be launching Preserve A and the strong performance that we've seen outside the U.S., but also in terms of the early experience. It's creating a lot of excitement in the U.S. market, so that will continue to be a key driver for us. In 2026, we're expecting to get the smaller sizes approved in the first half of this year, depending on the FDA, but we're very confident we should have that in the first half of the year. And that's just going to really be the start of the super cycle of innovation that we mentioned before with the recon indication, which we are expecting to be a key driver for us in 2027. Also looking at Ergo 2, which will enable us to bring Amia to the marketplace. So, you know, our plan is still the same. We expect to be a dominant share in the U.S. market. We're on that path to get there. And, you know, I think that's probably going to happen a little bit sooner than, you know, I think we originally planned just based on the strong momentum we've had so far.

Yeah, Sam, you know, if you look at the guidance we've given, you know, for the U.S. for it to exceed 30 percent of our sales, you know, it's almost a third of our sales will be coming from the U.S., if not more, in the second full year. So we've got a lot of momentum and the U.S. is

going very, very well. Yeah, really helpful there. And maybe just following up on my last point, obviously, you guys have a lot of, you know, organic opportunities with the million invasive, recon, but, you know, maybe longer term, are there any gaps in the portfolio where maybe you're looking at that, you know, you have this, the infrastructure now, where maybe you could be adding additional capabilities to the portfolio?

Yes, Sam, it's a good question, you know, and I think it's part of the reason for my transition, you know, into this global strategy role is that, you know, with the financial performance of the company in a very good spot. You know, there are things like you're describing, you know, business development, go-to-market strategies, you know, the way that we, you know, we prioritize things in our portfolio of innovation that I can now spend more time focusing on, right? Because there are significant opportunities, as you're describing, to continue to expand what we're doing and to really realize the potential of what this company has put into motion.

Really helpful. Congrats on the transition here.

The next question comes from Alan Gong with J.P. Morgan. Please proceed.

Thanks for the question. You touched upon it already in response to some other questions, but I'm just curious about the contribution you're currently factoring into the 2026 guide from some of the pipeline products you have between small sizes and reconstruction. Is reconstruction going to be more of a 2027 story, and how quickly can you really ramp that up once you get the approval since, as you mentioned, you're already seated in around 200 hospital facilities.

Yes, so on reconstruction, it is likely a 2027 and 2028 and beyond story for us, right? Because obviously it's still with the FDA. Nothing has changed our opinion that that product is approvable and should be very soon. But then there is the blocking and tackling of simply getting into hospitals, right? It takes time to work through the vac committees and to get on contracts and things and that will take time but um but what we've already done is we've we've seen strong interest from hospitals already we're already in a number of them and and there's a lot of interest in in recon uh getting to market and getting in the hands of a lot more surgeons

yeah alan just to add to that you know as uh raj uh highlighted and is you know the recon our expectation is that's where we're going to see the the impact in 2027 so we're not really considering that for 2026. And also, as you look at Preserve A, I think we see a tremendous upside in those numbers. And, you know, I think we've been very pleased with the initial response, not only in the U.S., but outside the U.S. And I think that has the opportunity for upside for us

in terms of how we drive the business this year. Got it. And then just a quick follow-up on spend. And, you know, when we look at 2024, we saw a pretty linear increase in spend to support the U.S. launch. This year was a little bit bumpier, talking specifically about SG&A, and it sounds like you've already put in a good amount of investment into the U.S. Salesforce expansion you previously talked about early on in the year. So just any color on the cadence of, you know, spending on the operating side throughout the year. Or should we expect it to be a little bit more front half weighted and then a little maybe improvement in the back half? And then maybe next year we see a little bit of a step up to support reconstruction. Thank you so much.

Yeah, I think your question is a good one. I mean, you look at the overall spending for us, you know, we talked about 195 to 200 million dollars. But if one X is out non-cash expenses and one time things, you know, that's 175, 180 million dollars in cash operating expenses, which compares to number, you know, roughly 160 or so, right? So the increase is well below, you know, the 50-plus million dollars of revenue expansion we're going to see this year, right? So we are starting to see the significant leverage in the model playing out, and that's going to continue in 27 and beyond. Even the incremental investment to support the recon market will be well below the opportunity that that represents. And so, again, that's another source of leverage for us. But as it relates to kind of the timing, it is not linear, right? We do have certain expenses that hit at certain times, you know, as the first quarter will actually likely be a little below trend and then it'll pick up in the back half of the But, you know, we're supporting a lot of the U.S. expansion early on and then it'll continue to be leveraged over the course of the year. But it's not going to be kind of flat every quarter, as you described. It'll be a little up and down with the first quarter perhaps being a little lower and then picking up in the middle part of the year in the back half.

The next question comes from Caitlin Roberts with Canaccord Annuity. Please proceed.

Thanks for taking the questions, and congrats on all the new rules to all. As it relates to revenue guidance, anything to call out from a seasonality perspective this year, particularly as you ramp further in the U.S.?

So it's a good question, right, because the U.S., we do expect, is going to continue to grow, right? So, sequentially, we should be up in the first quarter, modestly, right? It is a quarter where it's usually a down quarter for the market overall, and then you'll see kind of continued step-ups every quarter with a very strong finish to the year in the U.S., again, following normal seasonality. Internationally, it's a bit more normalized because you're not quite growing the same rate you are in the United States. And so, overall, you know, it's going to be that similar pattern where the first quarter is down. You see a pickup in the second quarter, it's down a little bit in the third quarter, and we see a very strong finish to the year. But you do have the subtlety of what's happening in the U.S. with a very strong growth we're seeing overall.

Great, thanks. And then just one more, you know, just how big of your current accounts in the U.S., would you say, are high-volume accounts? And then any color on kind of the average penetration within your accounts?

Yeah, it's a good question. I mean, when we started, you know, a little over a year ago, we did sign up a lot of high-volume, larger accounts, a lot of interest in the product. That's broadened out a bit. You know, the 1,500-plus accounts we have now kind of span the spectrum of where we are. And I would say, you know, while it's hard to get exact numbers on penetration, we're still quite low in a number of markets, and that's based primarily on the timing of when these accounts came on, right? So an account that's been with us for six months or less, it's going to be lower than one that's been with us for a year. And so 2026, the story for us is going to be about continuing to expand the number of accounts that we have in the United States, but also going quite a bit deeper into all these accounts. And that's what's really going to drive the results. There's a lot of potential there. We're still early in a lot of the customers we've signed up over the back half of last year.

Yeah, Caitlin, just to add, you know, that's going to be a big focus for us in 2026. Obviously, in the beginning, you want to get as many accounts. And, you know, the early adopters, I think we've really seen, you know, strong push where, you know, Motiva is a majority, if not, you know, almost all their volume. It's really now then that the next phase has really enhanced that penetration, and that's a big focus for us. I think there's a lot of, you know, opportunity in that area. I think in certain accounts we're underdeveloped. Now, granted, that's going to happen over time as they work through their schedules. But as Raj noted, this is a key driver for our growth, you know, this year.

Awesome. Thanks so much.

The next question comes from Mason Carrico with Stevens. Please proceed.

Hey, guys. Thanks for the questions here. I guess first, could you just talk about your expectations around China this year? What are you baking in there? Sorry if I missed it. And really, what do you view as kind of the key hurdles to unlocking that market, whether it be in 2026 or 2027 or, you know, a future year?

Yeah, thanks. thanks um you know as we we mentioned uh in in the prepared remarks and we've really communicated this in the in the last couple of of calls you know this is a a big focus for us and and you know i think the the the start in china in terms of the distributor building out their commercial capabilities was slower than we would have liked and we put a lot of focus in in that area in terms of, you know, around their organization in terms of some of the strategy and targeting different hospitals pricing. And, you know, we've been very pleased over the last six months in the back half of the year that we're seeing very good progress in terms of the sellout. So I think a lot of this work is really having an impact. And, you know, our expectations remain the same. You know, this market is a very large market. And we expect to have the same type of, you know, dominant share in China that we do it throughout the rest of Asia.

Got it. And with the launch of Preserve A this year, it seems like ASPs and the USP should benefit. So I guess how much of U.S. growth in 2026 do you really see coming from volume versus ASP expansion? Or I guess how do you think about that algorithm, that growth algorithm, even moving into 2027?

Yeah, I think, Mason, we're still so early in the penetration in the United States that the majority of the growth is going to come from continued unit growth, right, if that's how you described it right. So continue to take share, procedure volume, you know, that is what's going to drive the revenue. Preservate is certainly going to contribute. We're going to launch it here, you know, in the first quarter very soon, and, you know, it will play out over the course of the year. But for us, it's still primarily about penetration into this market and taking share, you know, from the incumbents.

Thanks, guys.

Thank you. That is all the time we have for questions today. I would now turn the call back over to Peter Caldini for closing remarks.

Thank you, Operator, and thank you, everybody, for joining the call today. You know, we've made tremendous progress over the last 12 months. I think we're in a very good position to really capitalize, I think, on a unique opportunity and the strengths that we have, especially as around our product and pipeline. So very happy with the progress and really appreciate everybody joining the call today, and I look forward to talking to everybody in the future. Thank you.

Thank you. This thus concludes today's teleconference. You may disconnect your lunch this time. Thank you for your participation, and have a great day.