Good afternoon, everyone, and welcome to the TELA Bio Third Quarter 2025 Earnings Conference Call. This call is being recorded. Now, I will hand it over to Louisa Smith from Gilmartin Group. Please proceed.

Thank you, Kelvin, and good afternoon, everyone. Earlier today, TELA Bio released financial results for the third quarter 2025. A copy of the press release is available on the company's website. Joining me on today's call are Tony Koblish, Chief Executive Officer; Jeff Blizard, President; and Roberto Cuca, Chief Operating Officer and Chief Financial Officer. Before we begin, I'd like to remind you that during this conference call, the company may make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's annual report on Form 10-K and quarterly reports on Form 10-Q, which identify the specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development and pipeline opportunities, product potential, the impact of various macroeconomic conditions identified in our filings, like changes in surgical procedural volumes, the regulatory environment, sales and marketing strategies, capital resources or operating performance. With that, I'll now turn the call over to Tony.

Thank you, Louisa, and good afternoon. Thank you for joining TELA Bio's Third Quarter 2025 Earnings Call. Q3 2025 was another significant step forward for TELA Bio as we continue to expand our commercial activities, enhance our operational discipline, and strengthen our patient-focused culture. We reported revenue of $20.7 million for the quarter, reflecting a 9% increase compared to the previous year. This growth was driven by greater adoption among our current customers and the addition of new accounts, highlighting the increased demand for our OviTex reinforced tissue matrix and OviTex PRS portfolios, as well as our growing presence in Europe. International sales also grew by 9% compared to the last period, fueled by improved performance in the U.K. and early successes from the launch of the OviTex IHR in Europe. In recent months, we’ve focused on reinforcing our operational foundation, making investments in our sales organization which we anticipate will lead to better commercial outcomes in the future. We've also shown financial responsibility in our sales and marketing expenditures, which decreased as a percentage of revenue from 89.7% in Q1 to 83.5% in Q2 and down further to 73.6% in Q3. Furthermore, we have enhanced the capabilities and expertise of our Board to provide valuable strategic insights as we enter the next phase of growth. Additionally, as announced this evening, we have strengthened our balance sheet, alleviating financing concerns and allowing us to concentrate fully on execution and growth. With these foundational elements now established, we are ready to accelerate under the right leadership and strategy. Before handing the call over to Jeff to discuss updates in the commercial organization, I’d like to highlight some key accomplishments and milestones we achieved in the third quarter that illustrate TELA's growing presence in the soft tissue restoration market. As mentioned during our last call at the American Society of Plastic Surgeons meeting, OviTex PRS was highlighted in three scientific abstract publications. These presentations have contributed to a substantial body of clinical evidence, now exceeding 50 published or presented works on OviTex and 10 on OviTex PRS, involving over 1,100 patients in peer-reviewed studies and ongoing data collection from more than 2,500 patients. I’m also happy to report that two sites have been activated, with the first patient enrolled in our hiatal study, Evaluating Clinical Hiatal Hernia Outcomes using OviTex or ECHO. Collectively, these milestones indicate the continued growth of our real-world data, which boosts surgeons’ confidence and encourages broader adoption, reinforcing the clinical validity of our technology. In the third quarter, we reached a significant commercial milestone by surpassing 100,000 implantations of OviTex and OviTex PRS combined globally. This achievement further emphasizes our growing influence and ongoing progress in the soft tissue repair and reconstruction market. We continue to broaden our market presence both in the U.S. and internationally. In Europe, we increased awareness through focused surgeon engagement, including a Cadaver lab in July with 30 key surgeons and made headway with the U.K. NHS value-based procurement initiative, securing NHS finance approval in September. In the U.S., we solidified our national reach through new and expanded contracts that made our portfolio accessible across a range of health systems, from some of the largest and most innovative networks to community hospitals, increasing our market access in the quarter by an additional 835 hospitals. We have recently welcomed two new members to our Board of Directors, Betty Jo Rocchio and Bill Plovanic. Betty Jo will offer crucial insights into our market access strategy due to her extensive experience in promoting clinical excellence and optimizing supply chains at large healthcare systems and group purchasing organizations. Additionally, Bill’s background as an investor and his experience running publicly traded MedTech companies will be invaluable in driving long-term shareholder value and enhancing communication with our investors. Now I would like to pass the call to Jeff, who transitioned from our Board to become President in June. Since then, he has been pivotal in refining our commercial strategy and fostering a culture within our sales organization that prioritizes patients and results. Jeff has the precise blend of operational expertise and strategic vision required for this moment. He will share his insights on our third quarter performance and our positive outlook for the future. Jeff?

Thanks, Tony. I'm pleased to report on the important progress we've made in strengthening our commercial organization and executing against the strategic priorities that we outlined on our last earnings call. While our Q3 results came in lower than we hoped, we still achieved a new global quarterly revenue record of $20.7 million, which marks TELA's third consecutive quarter of sequential growth in 2025. This momentum reflects the durability of demand for our product lineup of soft tissue repair solutions. Q3 was a quarter dedicated to building a stronger foundation, and we've now positioned TELA for sustainable long-term growth. Over the last 3 months, we revamped our commercial field leadership, and we recruited some of the top medical device representatives across the U.S. These individuals bring strategic business acumen, deep clinical expertise, and a shared commitment to our mission of improving patient outcomes. With these hires in place, we closed the quarter having reached our 2025 budgeted commercial headcount target of 76 territory managers. Another key highlight in Q3 was our continued alignment with our strategic partner, Advance Medical Solutions and their LIQUIFIX fixation technology. AMS expanded its clinical support team in the field. They worked side-by-side with our representatives to drive patient identification, utilization, and surgeon adoption through multiple evaluations. Their investment, combined with our commercial focus, led to our best revenue quarter ever with LIQUIFIX, highlighted by 126% growth year-over-year with the user base. This reinforces the value of our partnership and the opportunity ahead. As we enter Q4 and look ahead to 2026, I'm increasingly confident in the strength and capability of the team that we're building. Since joining TELA in June, we've been committed to equipping our commercial organization with the best tools, resources, incentives, and compensation structures needed to fully unlock our team's potential. At the same time, the investments that we're making in medical education, market access and data analytics are expanding our competitive advantage and positioning us to become a market leader in hernia and plastic and reconstructive surgery. We now have the right leadership in place. We are attracting high-quality talent, and we are winning by being present at the bedside, supporting our surgeons to help them drive optimal clinical outcomes for their patients. With that, I'd like to turn the call over to Roberto, to review our financial results.

Thanks, Jeff. Revenue for the third quarter of 2025 increased 9% year-over-year to $20.7 million, with revenue from OviTex growing 6% and OviTex PRS revenue growing 12% from the prior year period. OviTex unit sales grew 22% for the quarter, while PRS unit sales grew 3% for the quarter. Gross margin was 68% for the third quarters of both 2025 and 2024. Gross profit was $14 million in the third quarter of 2025, compared to $12.9 million in the same period in 2024. Sales and marketing expenses were $15.2 million in the third quarter compared to $16.5 million for the prior year period. This decrease was mainly due to lower compensation costs, consulting, and travel expenses, which were offset by higher commission expense on an increased revenue base. General and administrative expenses were $3.9 million for the third quarter compared to $3.7 million in the prior year period. R&D expenses for the third quarter were $2.3 million compared to $2.1 million in the prior year period. Total operating expenses were $21.5 million in the third quarter compared to $22.2 million in the prior year period, and $23.2 million in Q2 2025. Loss from operations was $7.6 million in the third quarter compared to $9.4 million in the prior year period. Net loss was $8.6 million in the third quarter compared to $10.4 million in the prior year period. We ended the third quarter with $29.7 million in cash and cash equivalents, reflecting cash consumption of $5.7 million in the quarter. For the reasons that Jeff just outlined, we now expect revenue for the full year 2025 to grow at least 16% over 2024. While we don't typically provide color on the coming year this early, since we are in the middle of budgeting for 2026, we did want to provide investors with directional expectations for next year revenues. Specifically, we are confident that revenue in full year 2026 will grow at least 15% from 2025. After we've completed our budget process, we will update our expectations and provide appropriate additional information at the latest on our 4Q '25 earnings call. Finally, let me touch on some enhancements to our balance sheet that we made today. First, this afternoon, we announced the refinancing and upsizing of our debt facility from $40 million to $60 million. A second tranche of $10 million is available in the future on a payment of trailing 12-month revenues of $100 million. Second, we also completed a $13 million equity offering. Between the 2 transactions, we will add approximately $26 million in incremental net cash to our balance sheet and have access to an additional $10 million debt tranche in the future. This is a significant bolstering of our financial resources that we believe provides us with more than enough financial firepower to reach profitability. With that, I'll hand the call back to Tony, for closing remarks.

All right. Thank you, Roberto. Before we move to questions, I wanted to share another patient case that exemplifies the transformative impact of our OviTex platform and our mission to move the soft tissue repair market beyond traditional synthetic mesh. A recently published case report underscores the real-world impact of OviTex reinforced tissue matrix in a challenging abdominal wall reconstruction scenario. A 48-year-old man suffering from severe pancreatitis and abdominal compartment syndrome was initially treated using a standard of care temporary abdominal closure device. However, he failed to decompress, which necessitated multiple returns to the OR over an 8-week period. At that time, his surgical team believed that without attempting a different intervention, the patient would not recover. They then introduced OviTex in combination with negative pressure therapy to support a staged abdominal closure and the patient decompressed in a period of 1 to 2 weeks. The reinforced tissue matrix demonstrated early tissue integration and remodeling with minimal inflammation. At 44 weeks, full abdominal wall reconstruction was successfully completed with remarkable functional and cosmetic results. The patient is now 4 years post reconstruction and leading an active lifestyle with no evidence of recurrence. This case exemplifies how OviTex can help achieve life-changing outcomes for high-risk patients, reinforcing the value of our technology in addressing even the most complex soft tissue challenges. Stories like this illustrate exactly why we do what we do and why our confidence in the long-term potential of our portfolio remains so strong. Each successful patient outcome reinforces the strength of our clinical foundation and validates the strategy and execution that are driving our momentum. As I reflect on Q3 and our progress this year, I'm encouraged by the trajectory we're on. We've taken decisive steps to position TELA for durable growth and an opportunity to meet or exceed expectations. We have new executive leadership in place who are initiating key strategic changes to our commercial organization and are backed by a strong record of execution at their prior organizations. We have added experienced strategic thinkers to our Board, who bring deep expertise in clinical and GPO access, corporate governance and street-facing communication support for the next phase of our growth. Across the organization, we have instilled a culture of operational efficiency that is already showing evidence of its impact and improvements to OpEx leverage and cash burn reduction. And finally, we have strengthened our balance sheet through a comprehensive financing initiative that will eliminate uncertainty about our runway and allow us to focus purely on delivering consistent execution and capturing growth opportunities. With these foundational elements in place, we are positioned to move forward and drive results. I'd like to thank the entire TELA Bio team for the incredible dedication and passion they bring every day to drive our mission. I also want to recognize our surgeon and hospital partners and most importantly, the patients who are at the center of everything we do who inspire us to keep redefining what's possible in soft tissue repair and reconstruction. This is a pivotal time for our company and our industry, and I'm energized by what we're building together. With that, I'll now ask Kelvin to open the line for your questions.

Your first question comes from the line of Caitlin Roberts of Canaccord Genuity.

Maybe just to start through the rationale for the debt refinancing and the equity raise at this time. I mean, how comfortable do you guys feel now with your cash runway?

Thanks for the question, Caitlin. We feel super comfortable about our cash runway. The rationale for the debt refinancing was that the previous facility would have begun amortizing in June of 2026. And so we wanted to get ahead of that and replace it and if possible, upsize it. And as part of that process, we got some inbound requests from investors who wanted to support the company. And so we provided some access to a small size equity raise, which we completed today as well. So between the 2, on top of the $30 million that we ended the quarter with, we're adding about $26 million in net capital. And we believe that with the addition of the potential $10 million tranche on hitting our revenue target is much more than enough to get us to profitability.

Just talk through the lower guidance for 2025, and then also the early 2026 growth expectations and what you've really baked into the 15% for next year.

Sure. So let me start with next year. As I mentioned in the prepared remarks, we don't usually provide color on the coming year this early since we're really in the middle of the budgeting process. But we understood that with the resetting of the fourth quarter expectations, we needed to provide some base for investors. So we took a look at our expectations for additional hiring of reps and the pacing of that built in some cushion in case things don't go quite the way we're expecting to and felt confident that, that 15% growth number for the full year of 2025 is something attainable for us. The goal is to improve on that, but that's what the budgeting process, the internal budgeting process will help us understand.

Your next question comes from the line of Frank Takkinen of Lake Street Capital Markets.

Congrats on all the progress and congrats on the financing. I was hoping to start with maybe some more details around the sales force. Happy to hear you guys hit, I think, your hiring goal already at 76 territory managers. I think, Roberto, you were touching on some hiring next year, but maybe going a little bit deeper into kind of sales force hiring for next year would be helpful context.

Jeff?

Thank you, and I appreciate the question. So as we were budgeted for 76, we are continuing to fill our pipeline. Our goal is that we'll be at 90-plus in Q1. Our time to hire has shortened. We've opened up our recruiting philosophies, our criteria. Our national recruiters now know the candidates we're looking for and top-tier medical device representation. We're looking for sound clinical adaptability as well as really the strategic thinking that we ask our territory managers to have. This time to hire has been shortened in some markets to 1 day. We put a full panel interview together, get candidates in and by day's end, we actually have an offer, and we have candidates signed by close of day. This has found us some of the best people to help support our organization to grow. So our priority is to constantly add and continue to have a bench between our account specialist team that's in place now. We promoted one last quarter to get to the 76 total, and we will constantly focus on that team as part of our bench.

Yes, Frank, what gives us confidence here is that even if you look at the third quarter and you assess the reps, the cohort of reps that have been with us for a minimum of 6 months, that group of 50, 52 reps performed very well in Q3 and hit virtually 100% of what their targets and quotas are. So where we fell short was in those regions that were struggling to hire. Those positions and leadership roles have been upgraded already. We have dynamite new leaders in place, as Jeff discussed already, and that's really propelled us forward to fill in that 76. You recall, our plan was to have that 76 on board by around Q2. So now that we've got this momentum, we've got leadership that's solidified across all of our selling regions, it makes sense to continue on and drive towards that 90 to 95, low 90s for next year. And that cohort of 50, 52 reps is driving about $1 million on an annualized basis. Even with the criteria of being on board for 6 months. So the faster that we can get a bigger cohort of reps on board, the faster we can drive them to that $1 million annualized target, it allows us to have confidence in driving growth for next year. That probably circles back a little bit to Caitlin's question as well.

Maybe just one more on the breakeven profile in light of some of these investments as well as the financing. Roberto, maybe it would help to kind of refresh how you guys are thinking about breakeven. I think you were previously in that kind of high $20 million per quarter to support that. Maybe any color on that would be helpful. And then I'll hop back in queue.

Sure. Thanks, Frank. So yes, we continue to think that high 20s is the place where we can achieve breakeven. The goal is to keep OpEx reasonably flattish, notwithstanding the growth in the sales force. One of the ways we expect to do that is by drawing for that growth from our account specialist ranks such that there's not as much of an incremental expense for the additional PMs. But we'll be revising all of our expenses, and Jeff and his team have been digging in on pretty much every dollar that supports the sales force and the selling process and thinking how we can be more efficient with those dollars.

Yes, Frank, there's been a massive improvement in sales force efficiency down from almost 90% of sales to a little over 70% of sales just in the 3 quarters of this year. So we expect that efficiency to continue as well.

Your next question comes from the line of Michael Sarcone of Jefferies.

I guess can you provide a little more color if you're talking about roughly flattish growth in '26 or consistent growth in '26 versus '25, but you're also talking about increased productivity for reps. So I guess, can you talk about kind of the moving pieces there as we're looking out to '26?

Yes. Well, I think it's all dependent on having the heads filled, right? That's what's best to us this year and last year. So I think we're giving ourselves some room to operate to make sure that we get the right talent in the right seats at the right time. And like Roberto said, we will reevaluate and have an update for you on all things related to '26 on our next earnings call.

Tony, I guess, just a follow-up on the sales force. You've implemented some enhanced training programs and you're expecting a faster ramp to productivity. Can you give us any update on what you're seeing for newer classes of reps in terms of kind of the ramp curve versus older classes?

Yes. Sure, Mike. I'm going to introduce a new player here in the Q&A. Jeff's #2 man, Jim Hagen, has joined us for some Q&A, and this is a good opportunity for you to get to know him.

Yes, to your question about our recruiting class and the enhanced training program, we have refined the hiring profile with our recruiters to better align candidates with our growth objectives. Our training team has developed a support network to deepen their clinical knowledge. We tested our latest class before their in-person training, and they achieved the highest scores ever for any class, which reflects the success of our new profile. The next group of recruits appears equally strong. With the infrastructure we’re building around our field team and the high caliber of new hires, we are confident that we will meet the growth target mentioned by Roberto next year.

Your next question comes from the line of Samantha Munoz of Piper Sandler.

This is Samantha on for Matt. I guess, first, we wanted to touch on guidance as well, but more of the 2025 focus. It kind of implies a minimal, maybe a little upside sequentially in Q4, which I think you've talked about historically has been a stronger sequential growth quarter. So I guess if could you just talk a little bit about what's baked into Q4 specifically?

Sure. We expect growth to be at least 16% year-over-year. Jeff and Jim have been working on improving the sales force's efficiency. There's potential for additional growth, especially since we have hired more sales reps, increasing our number to 76. We plan to continue hiring this year to prepare for strong performance next year, which could provide further growth opportunities. There has been some turnover in the sales force, and we are factoring that into our plans as well. We are confident in achieving that 16% growth, and there is some potential for upside beyond that figure.

Yes. I believe we're allowing ourselves some flexibility. In the third quarter, we made significant improvements and enhancements within the commercial leadership team. At the regional director level, we upgraded several positions. While this isn't disruption, but rather progress, we need to ensure that these individuals are able to assemble their teams. Much of the shortfall in hiring among representatives was in those regions that have since been improved. We're providing ourselves with some leeway to ensure the right people are in positions and to continue moving towards a stronger organization, with our primary goal being to start 2026 with the best possible team. In terms of sales team sentiment, this is the most enthusiastic I have seen within the commercial organization. We have an incentive for the end of the fourth quarter that aligns perfectly with the needs of not only our representatives and their individual areas but also the physicians, programs, and patients we support. We have initiated programs that genuinely reflect our business direction and our focus on optimizing outcomes. Personally, this is the most excited I've felt as the leader of the sales team as we approach year-end, and we are optimistic about a strong announcement in the fourth quarter that will showcase the energy and momentum with which we are pursuing the business.

There are no further questions at this time. And with that, I will turn the call back to Anthony Koblish, CEO, for closing remarks. Please go ahead.

All right. Thank you, Kelvin. I really appreciate the efforts of our team. I want to thank them for jumping in and embracing this patient-centric culture. I see the difference. It's working. And I want to thank all of our supporters, both in the financing and in the investor community and all those who have an interest in seeing us succeed in bringing next-generation technologies that are woefully needed to the soft tissue reconstruction space. So with that, thank you, and we'll see you next time.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.