Earnings Call Transcript - TELA Q1 2026

Operator, Operator

Good day, everyone, and welcome to TELA Bio First Quarter 2026 Conference Call. At this time, all lines are muted. To ask a question during the session, you will need to press *1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press *1 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Louisa Smith. Please go ahead.

Louisa Smith, Head of Investor Relations

Thank you, Carmen, and good afternoon, everyone. Earlier today, TELA Bio released financial results for the first quarter ended March 31, 2026. 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; Jeffrey Blizard, President; Roberto Cuca, Chief Operating Officer and Chief Financial Officer; and Jim Hagen, SVP of Strategic Operations and Marketing. Before we begin, I would 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 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, pipeline opportunities, sales and marketing strategies and the impact of various additional risk factors as identified in our regulatory filings. With that, I will now turn the call over to Tony.

Antony Koblish, Chief Executive Officer (CEO)

Thank you, Louisa. Good afternoon, and thank you for joining TELA Bio's first quarter 2026 earnings call. I will open with a summary of what we accomplished in the first quarter and our perspective on the road ahead. Jeffrey will then walk through some updates on progress in the commercial organization and our continued execution against the plan we laid out last quarter. Roberto will review our financials, and then we will open it up for Q&A. Last quarter, we laid out a framework detailing the decisive steps we have taken to reset our commercial strategy, and Q1 results show early proof points that our strategic plan is working. We currently have the largest, most effective field team in the company's history, and we have achieved the hiring targets necessary to deliver against our operating plan. Our sales territories are fully staffed with exceptional talent and new hires are ramping to productivity levels on expected timelines. The remainder of 2026 will be about executing on our redefined strategy, and the task ahead is to translate our U.S. commercial resetting to measurable success. The foundational work is behind us, and we are at an inflection point that should become increasingly visible in our results through the remainder of the year. Beyond upgrading our U.S. field team, there are several favorable tailwinds that give me confidence in delivering a strong 2026. To start, on April 1, we initiated the full U.S. commercial launch of the OviTex long-term resorbable reinforcement portfolio, which we are calling OviTex LTR. This product is one of the only fully resorbable tissue-based hernia repair solutions on the market. Surgeons and patients are increasingly demanding solutions that deliver durable long-term outcomes while minimizing exposure to permanent synthetic materials. With OviTex LTR, surgeons now have a full suite of products that offer the critical structure and strength required in the early phases of healing while avoiding the long-term risk of residual plastic material in the body. We believe OviTex LTR will be instrumental in attracting new surgeons who have yet to adopt OviTex by offering them and their patients a more effective, fully resorbable solution. We have priced OviTex LTR comparably to the rest of our hernia portfolio, preserving the value proposition for both surgeons and hospital administrators. Early feedback in the field has been overwhelmingly positive, and we believe that LTR will be a meaningful contributor to this product portfolio. Second, we saw breakout performance in our European business with revenue growth of 41%. As a reminder, this growth is driven entirely by our hernia portfolio as we are still in the regulatory process of bringing PRS to the market in Europe. We saw exceptional performance in the UK; we continue to deepen our presence, win new accounts, and gain clinical and administrative buy-in driven by our value proposition and product efficacy. As we start to scale within Continental Europe, we have found distinct unmet needs in those countries, the most pronounced being the demand from government-run healthcare systems seeking novel ways to optimize costs and patient outcomes. TELA is well positioned to win in these market dynamics. A strong validation of TELA's value proposition came through the NHS Supply Chain's value-based procurement evaluation, which selected OviTex for use in complex abdominal procedures. Through independent analysis, the NHS found that OviTex has the potential to reduce the need for revisional operations for hernia recurrence, lower the prevalence of postoperative complications, improve patient well-being, and generate cost savings compared with other biologic mesh options. We believe these findings are transferable across health systems and see a clear opportunity for our products to perform just as well in additional EU markets. Finally, the quantity and quality of evidence supporting OviTex continues to grow. Most recently, a meta-analysis was presented at SAGES comparing OviTex with other mesh options for ventral hernia repair. The authors were highly respected surgeons, well-known thought leaders in the space, and they concluded that OviTex is a safe and effective option for ventral hernia repair with significantly lower recurrence rates. These data emerged alongside the publication of results from a large real-world European evaluation of a resorbable competing product which showed recurrence rates exceeding 20%, consistent with several other studies of that product and nearly 10 times the recurrence rates observed across the OviTex portfolio. Before turning it over to Jeffrey, I would also like to address the strategic board changes we announced in late April. Four of our long-serving directors, Doug Evans, Kurt Azerbarzan, Vince Burgess, and Freddie O'Brien will be stepping down following our annual shareholder meeting on June 9. We are deeply grateful for their contributions and the strong foundation they helped establish for TELA Bio. Coming onto the board will be Joe, who is expected to serve as chairman, Lisa Colleran, Guy O'Neill, and Paul Thomas. Each of them has deep industry experience in scaling medtech companies and navigating strategic transformations. Bill Plavonic and Betty Jo Rocio will stand for reelection at the annual meeting and will provide valuable continuity as we reset our board composition. I am looking forward to working with this new board and believe that it will position TELA to execute with greater speed and focus as we advance our commercial strategy and drive towards sustained profitability. We exit Q1 with a strong foundation from which we can deliver against our commitments in 2026. To summarize, we have a fully staffed U.S. commercial team, an expanded portfolio that includes one of the only fully resorbable tissue-based hernia portfolios on the market, continued evidence supporting the significant benefits of OviTex, a European business that is driving exceptional performance, and a reconstituted board of directors to help us achieve our next phase of growth. With that, I will turn it over to Jeffrey for a more detailed look at commercial execution. Jeffrey?

Jeffrey Blizard, President

Thanks, Tony. On prior calls, I laid out a detailed overview of steps we have taken to recalibrate the commercial organization. I would like to spend some time providing updates on our progress. As Tony mentioned in his comments, our U.S. commercial organization is fully staffed now at our expected 2026 levels. Our attention shifts from recruiting and onboarding to development and execution. I mentioned in our last call that 40% of our field team was hired between Q4 and Q1. By Q2, nearly three-quarters of those new hires will have reached their six-month tenure at TELA. It is an important milestone, as six months is when we typically see territory managers break even and cover their cost. Also, it is around the same time that we see productivity inflection points when territory managers generate revenue momentum after building relationships, establishing clinical credibility, and working through procurement processes and training the clinical team so that patients can be treated with OviTex. I am very encouraged by the early results from our recent hires, as they are performing well ahead of any prior class and early-stage indicators, including account conversations and clinical engagement scores. The profile that we are recruiting and training for is working. Their output will follow, and we expect them to contribute at an increasing rate in the second half of this year in 2026. Previously, I also discussed how we were realigning territories to enable our field team to increase their presence in more densely populated regions with high volume potential. We are prioritizing deeper relationships within the hospital, leveraging the entire portfolio to treat more patients across the institution. We see signs of success already. Selling the full-bag strategy, especially in hernia, OviTex IHR and OviTex LPR are our fastest growing subsegments within our portfolio. This product mix shift is driven by U.S. market dynamics that are moving towards less invasive procedures, especially those performed robotically. Our year-over-year unit growth rate of 16% in OviTex shows that we are gaining market share and demonstrates that surgeons recognize TELA as the best in hernia products. We are primed and well positioned to capitalize on procedural trends, whether they are shifting toward robotic procedures as in the U.S. or towards open procedures as remains the predominant approach in the UK. The launch of a long-term resorbable option across the entire hernia portfolio gives us even more optimism that we can continue to capture procedural share. We have the only fully resorbable tissue product line that can compete in open, laparoscopic, and robotic repair across the entire spectrum of hernia procedures. Additionally, LiquiFix, with its greater than 50% year-over-year growth, has been a meaningful addition to our field team, as it offers our reps a non-penetrating fixation solution that helps engage surgeons who may not have previously been familiar with OviTex. Our U.S. sales strategy pivot to deepening our presence and expanding our implanted base in target accounts was validated by observed dynamics within OviTex PRS Q1 unit volume. The utilization of PRS declined in the quarter driven by the absence of several of our highest-volume implanters, who are not performing surgeries due to various personal or professional reasons. This is precisely the concentration risk our new commercial focus is designed to address: incentivizing our salesforce to mitigate future risks like these by training additional surgeons within the same practice to use OviTex, thereby reducing our dependence on any one single implanter and helping build a broader, more durable foundation for OviTex adoption. Finally, I want to highlight our European business and its 41% year-over-year growth. Several of the changes that we are making in the U.S. are modeled off the success that we saw within our European team. Notably, routine presence in the operating room, developing believers in the OviTex product line across multiple surgical specialties at target hospitals, and leveraging peer-to-peer networks to educate surgeons on the unique mechanism of action within OviTex. Our European team continues to be an example of what the right talent with enough tenure can do with a product that is as effective and novel as OviTex. Surgeons want a product that provides early strength, delivers a durable repair, leaves nothing behind, and is supported by our robust clinical evidence. The OviTex portfolio meets these needs. We now also have the commercial engine to get the product into more surgeons' hands. I am confident that the outcomes we see in Q1 validate these changes that we implemented. We have an incredible team, and we are approaching the market in a more strategic, focused manner that will unlock significant opportunities for us. I look forward to updating you on our continued progress in the months ahead. And with that, I would like to turn it over to Roberto for the financial review.

Roberto E. Cuca, Chief Operating Officer & Chief Financial Officer (COO & CFO)

Thank you, Jeffrey. Revenue for Q1 2026 was $19.1 million, an increase of approximately 3% compared to $18.5 million in the first quarter of 2025. Growth was primarily driven by our international business. International sales of $3.7 million represent a 41% increase over the prior-year period. OviTex revenue was $12.6 million, up from $12.1 million in the prior-year period. OviTex unit volume increased 16% year over year, with 5.8 thousand units sold in the first quarter compared to 5.0 thousand units in the first quarter of 2025. Dollar growth was partially offset by product mix: the proportion of smaller-sized units increased, compressing the ASP for that line. We view this as a positive, demonstrating our hernia portfolio has the breadth and clinical efficacy to meet surgeons' changing procedural needs. OviTex PRS revenue was $5.9 million compared to $6.0 million in the first quarter of 2025. Other revenue, which includes LiquiFix, was $0.6 million. Gross profit was $12.5 million in Q1 2026, in line with the prior-year period. Gross margin was 66% compared to 68% in the first quarter of 2025. The modest decline was driven by a higher charge for excess and obsolete inventory as a percentage of revenue. Total operating expenses were $23.0 million in the first quarter of 2026, essentially flat with $23.0 million in the first quarter of 2025. Sales and marketing was $16.5 million, down modestly from $16.6 million in the prior year, with lower commission expense partially offset by higher meeting and training costs. General and administrative was $4.2 million, up from $3.8 million, primarily due to higher professional fees. Research and development was $2.3 million, down from $2.5 million. Loss from operations was $10.5 million in Q1 2026 compared to $10.5 million in the first quarter of 2025, essentially flat year over year. As we signaled last quarter, Q1 typically reflects a step up in operating loss relative to Q4 due to seasonal revenue and spending patterns. Additionally, the first quarter of this year included certain compensation-related costs associated with completion of our hiring build-out. We expect operating loss to improve markedly as revenue grows throughout the year. Net loss was $12.3 million in Q1 2026 compared to $11.3 million in Q1 2025. The increase was primarily due to higher interest expense of $2.1 million reflecting our new, larger Percepta credit facility that was put in place in November 2025, versus $1.2 million in the prior-year period under our prior mid-cap facility. We ended the quarter with $39.5 million in cash and cash equivalents. As per our full-year 2026 outlook, we are reiterating guidance of at least 8% revenue growth over 2025, with Q2 2026 revenue of approximately $20 million. I will turn the call back to Tony for some closing remarks. Thanks, Roberto.

Antony Koblish, Chief Executive Officer (CEO)

As we have done in prior quarters, I would like to close with a patient story that grounds us in the purpose behind everything we do. A female patient presented to a trauma center in Liverpool, UK following a fall from a height. The patient experienced severe multi-organ trauma, required damage control surgery, staged reconstruction, and careful management within a challenging surgical field. Traditional solutions were limited. The local TELA Bio representative helped the surgeon identify the appropriate use of OviTex 1S to support the required reconstruction in a challenging anatomical and clinical environment. Due to the timely use of OviTex and the product's unique mechanism of action, the patient underwent a successful abdominal wall reconstruction despite a highly complex presentation. Eleven months out, the patient has no wound- or mesh-related complications, thus avoiding additional surgery and a prolonged recovery. This story is a great example of how OviTex, when selected and appropriately used as the first mesh in a patient's treatment, helps achieve positive patient outcomes and reduces the future burden on health care resources. Before we open the line for questions, I want to take a moment to recognize the team. Amid much change, we solidified our commercial foundation, launched a portfolio expansion that will benefit many patients for years to come, enrolled more patients in our clinical studies, saw our belief in OviTex reaffirmed through more published evidence, and reconstituted our board of directors. That does not happen without a team that is fully committed to the patients and the surgeons we serve. I truly believe that we are set up for the next phase of our growth starting with a strong 2026. I look forward to what is ahead for TELA. Carmen, please open the line for questions.

Operator, Operator

Thank you so much. And as a reminder, to ask a question, simply press *1 to get in the queue and wait for your name to be announced. To withdraw your question, simply press *1 again. Our first question is from Caitlin Cronin with Canaccord Genuity. Please proceed.

Analyst (Caitlin Cronin), Analyst, Canaccord Genuity

Hi. Thanks for taking the questions. I would love some more color on your guidance philosophy for Q2, given your new commercial strategy emphasizing density. Was that disruptive in Q1 as you expected? And do you expect this to have an impact in Q2?

Jeffrey Blizard, President

So we used the first quarter to roll out not only a new strategy, we also had expanded territories and a revised compensation plan. So we threw a lot at our commercial organization and still resulted in a quarter of prior-year growth. As we sit inside TELA Bio and look at what we went through, the changes in one quarter alone are substantial; not many commercial companies experienced that same amount of internal organizational change. We were very fortunate that the team really stayed focused on the patient and the outcomes and also prepared us for launching a brand-new product with LTR. Our training has been redesigned for our onboarding classes, trying to ramp up that speed faster for the return on bringing people onto the team. Ultimately, getting into these programs and establishing relationships and being bedside matters. We are at that critical mark now between the six- and nine-month onboarding timeframe where we actually see that rate of return and feel really good about the second half.

Roberto E. Cuca, Chief Operating Officer & Chief Financial Officer (COO & CFO)

And I would highlight one thing that Jeffrey said in the prepared remarks, which is that we are coming up now on a pretty substantial portion of our salesforce hitting the six-month period. That is hitting or will be shortly hitting breakeven. As Jeffrey said, there is an inflection point in their productivity at that point. So we expect towards the end of the second quarter, beginning of the third quarter, for that traction to begin exhibiting itself and generating pretty significant revenues in the third and fourth quarters.

Analyst (Caitlin Cronin), Analyst, Canaccord Genuity

Great. And you noted last quarter that the competitive environment in Europe differs a bit from the U.S., given the pricing and bundling dynamics. Could you provide more color on that and how that is potentially helping the European momentum?

Antony Koblish, Chief Executive Officer (CEO)

Yeah. I will cover that, Caitlin. Europe is a different structure. For the most part, they tend to have socialized medicine. A lot of what is done there is based on tender processes where the product is evaluated by a central agency for value proposition, both economic and clinical. It is a fairly straightforward assessment of all the different product opportunities, the data, how they are supported, and what they cost. It is a much more complicated picture in the U.S., where there are cross-category bundles, wraparound rebate strategies and bundled tiered pricing, and complex contracting mechanisms that IDNs, GPOs, and large companies use. That tends to make for a much more difficult and complicated situation and system. In Europe, it is very understandable, and it is a wide-open market if you have the right product with the right data at the right price point. I would classify that as a value proposition, and we certainly have that. I think that is a perfect representation of what is possible in the U.S. market once we start working through and have our restructured commercial strategy to break through some of those barriers and opaque processes. That means smaller regions, smaller territories, more focus, and more depth, not being as spread out as we used to be. So it is critical that we get more focused and tighter in our alignments, and that is really the main reason.

Analyst (Caitlin Cronin), Analyst, Canaccord Genuity

Thank you.

Operator, Operator

Thank you. Our next question comes from Frank with Lake Street Capital Markets. Please proceed.

Analyst (Ian), Analyst, Lake Street Capital Markets (on for Frank)

Hey, guys. This is Ian on for Frank. Congrats on the quarter, and thanks for taking questions. First, on the Q4 call you had said the 40% new cohort had stepped up nicely in Q4. Did the productivity from that group continue stepping up at the same pace in Q1, or did you see a more pronounced inflection in Q1? How does that change how you are thinking about time to break out for that cohort relative to the 6- to 9-month benchmark?

Jim Hagen, SVP Strategic Operations and Marketing

All right, and it's Jim. I will take that one. You are right: in Q4, when we were talking about the new hire cohort, you talked about leading indicators of testing scores that were faster and higher than previous cohorts. We have seen that translate in Q1 in terms of ramp time and productivity in their first 30, 60, 90 days in a role. From the metrics we look at internally, those are trending higher than previous cohorts, which gives us bullishness that these are the right people we hired. We have continued to add additional people in Q1, so we are at our staffing levels for 2026 now. So just like the other cohort, they are going to need time to ramp. We still believe that the six-month inflection point is real. They are breaking even, as Roberto talked about, and beyond six months you start to see a nice upward slope in productivity. That is why all the points you heard from Tony, Jeffrey, and Roberto make us confident that the back half for us is set up strong.

Antony Koblish, Chief Executive Officer (CEO)

Yeah. That 40% of new reps will be through their six-month bed-in period or start-up phase by the end of Q2. We are not seeing the full benefit of that cohort yet, but we see some good signals.

Jeffrey Blizard, President

Just maybe for some further clarification: when we bring in a new hire, for the first three months they are not in their territory. We ship them around the country for in-house training, out with field sales trainers, across different regions so they can experience multiple procedures from different users before they ever step foot in their territory. You figure three months just to understand the geography, the hospital maps, how to get in and get access. That takes a good three months to establish, and then around month six, after three months of understanding their role within those hospitals, is where we see that inflection point.

Jim Hagen, SVP Strategic Operations and Marketing

And by that, it is our training process fully as well.

Analyst (Ian), Analyst, Lake Street Capital Markets (on for Frank)

Okay, got it. Thank you. And then just one more for me. Can you provide an update on the items you called out as factors of safety related to the 8% growth rate—specifically the contract execution timing, new rep maturation, and territory splits? How are those tracking?

Jeffrey Blizard, President

So a couple points, and I will have Jim add some metrics as I explain what makes us confident in that 8%. I think there are four main reasons. First, our current U.S. sales hiring and effectiveness: we are fully staffed at greater than 90 territory managers. Second, we have 19 greenfield territories—brand-new markets where we were not even in previously, identified around key programs in key cities. Third, our EU performance has come in quarter to date at 41%, and they will continue to trend above plan, especially given that we got a new sales leader there who is shoulder to shoulder with his team. Fourth, we have the OviTex LTR launch, which is really the Goldilocks device in its category. And finally, the evidence being published about some other competitive products in the space supports our positioning. So we are bullish around that 8% number.

Antony Koblish, Chief Executive Officer (CEO)

Yeah. The profile for our product is rising in the U.S., and I think we meet that opportunity with a fully staffed salesforce and 19 or 20 new greenfield territories. These are elements we have layered together to give us confidence.

Jim Hagen, SVP Strategic Operations and Marketing

Maybe the last comment I would add is what was not mentioned in our prepared comments: the investment in medical education. We continue to add labs, get didactic programs built, and run peer-to-peer programs. That is where the rubber hits the road in medtech when surgeons can see this used up close and be in settings outside of their programs to ask questions and see how this applies to patients. We have 40 surgeons coming together this weekend, and we have done several of these programs this year. So that is also loading the pipeline as well.

Analyst (Ian), Analyst, Lake Street Capital Markets (on for Frank)

Okay. Thank you, guys.

Operator, Operator

Thank you. Our next question comes from Michael Sarcone with Jefferies. Please proceed.

Analyst (Michael Sarcone), Analyst, Jefferies

Hey. Good afternoon, and thanks for taking our questions. To start on guidance, can you speak to the level of visibility into customer demand trends that you have in the business today as you target that 8%?

Jim Hagen, SVP Strategic Operations and Marketing

Yeah, Michael, it's Jim. We referenced not just revenue performance but unit performance. In the hernia portfolio alone, we are seeing 16% unit growth, which hits the demand side of the equation you are talking about. Surgeons are voting with their procedures and are selecting us more often. That is in the context of a U.S. market trending toward less invasive procedures; we have a portfolio that adapts whether surgeons want to go open, laparoscopic, or robotic. With that drive toward laparoscopic and robotic, we see OviTex LPR and OviTex IHR continuing to grow. We still see growth in 1S and Core, but the product mix shift will continue for the rest of 2026. We expect unit growth to outstrip revenue growth for the rest of the year due to mix, but the unit growth gives us confidence we are taking market share and that surgeons are adopting OviTex.

Antony Koblish, Chief Executive Officer (CEO)

We are perfectly aligned with the robot, which is where the bulk of these hernia procedures are moving. We have a product portfolio that is compatible with the robot for each type of procedure. At the end of the day, we want to be a full hernia supplier, covering the high-volume procedures. We are gratified to see the unit growth continues to be strong. Our IHR and LPR are leading the way, which is how it should be given the market architecture right now.

Analyst (Michael Sarcone), Analyst, Jefferies

Really helpful. And on PRS, you mentioned utilization decline due to absence of some high-volume implanters. What is baked into guidance for the PRS side of the business? Are you expecting to recapture some of that utilization through the year?

Jeffrey Blizard, President

I will start. Our ASP is really high on these products, but they are comprised of a smaller percentage of our implanters. When a few went out on maternity leave, a few on vacations, and oral boards were during this first quarter, we saw a drop in our PRS business. This is precisely why we reconstituted our strategy to build a user base and not be dependent on a few key users. We will see some recovery in Q2 as we have realigned the salesforce and added more focus on PRS, expanding the bag for our sales team. That will give us more depth in accounts, more users per site, and ultimately reduce reliance on a small number of implanters.

Antony Koblish, Chief Executive Officer (CEO)

We have to overcome the rule of small numbers for implanters and the high ASP on that product. That is why we have redesigned the sales force to drive deeper engagement and more users per site.

Analyst (Michael Sarcone), Analyst, Jefferies

Got it. Thank you, guys.

Operator, Operator

Thank you. Our next question comes from Matthew O'Brien with Piper Sandler. Please proceed.

Analyst (Matthew O’Brien), Analyst, Piper Sandler

Afternoon. Thanks for taking my questions. I am sorry to beat this dead horse, but the back-half ramp is steep. You guys have talked a lot about how you are going to get there. If I look at 2023 when you had a pretty stable salesforce, you did about 55% of revenues in the second half of the year. You are calling for a similar split in 2026 with a sales group that is perhaps a bit more green than in 2023. What are you seeing in April and May that gives you so much confidence? And why are you confident you will retain this group given historical fluctuations in rep retention at TELA?

Jeffrey Blizard, President

This is Jeffrey. I would say we did not have the same level of data, process, and discipline in prior years that we have now. We have better territory alignment, key leadership, and field leaders today. We have been aggressive to make these changes quickly over the last two quarters, and I don't think many commercial organizations would have implemented and sustained this amount of change. Our training programs support this: we provide the right resources and tools for our teams. Jennifer Armstrong, our SVP of HR, has streamlined recruiting with panel interviews that end with Jim and me for final interviews. In our last 30 hires, it feels like TELA is becoming a destination—people want to be on this team given our innovation, pipeline, trajectory, and field leadership. That helps retention starting from the interview process.

Jim Hagen, SVP Strategic Operations and Marketing

I would add two other parts Jeffrey mentioned. One is clinical evidence: from 2023 till now we are seeing more influential surgeons with large peer networks adopt our product. That peer network is a critical part of momentum that we did not have in 2023. Second, we just launched OviTex LTR, which matches the fully resorbable category—the largest-growing category in hernia—which we did not have in 2023. Between the talent we brought in, the new part of the portfolio, and influential surgeons publishing data on us and adopting us, those are tailwinds we did not have in 2023 and give us confidence for the back half.

Jeffrey Blizard, President

And on retention, our recruiting efforts have become streamlined. Panel interviews and strong final interviews help ensure cultural fit. People are doing research on us and wanting to be here. That helps retention and starts within the interview process.

Roberto E. Cuca, Chief Operating Officer & Chief Financial Officer (COO & CFO)

And Matthew, one additional thing: in 2023 you saw a salesforce that was sized pretty similarly to that in 2022, so the growth you saw in 2023 was with an in-place salesforce. The difference in 2026 is that we have added a number of sales reps at the end of Q4 and the beginning of Q1 who will begin to get traction and will hit that inflection point Jeff talked about right around the midpoint of the year—end of Q2, beginning of Q3—and we will be adding to that growth and further skewing revenue to the second half versus the first half. That growth in the salesforce that was completed at the end of the year and beginning of this year makes us comfortable with the second-half skew in our guidance.

Analyst (Matthew O’Brien), Analyst, Piper Sandler

Okay, appreciate that. And then Tony, the board changes are notable. You're losing some long-serving directors and adding seasoned executives. How can they influence TELA over the next several years with their experience to help TELA sell what is still the best product on the market?

Antony Koblish, Chief Executive Officer (CEO)

I think that's a great question. It is customary to refresh a board as a company develops and gets to a new phase. Our previous board served us exceptionally well through earlier phases, but this new team has tremendous experience in implant-based medical device and biologic biomaterial products. Everyone coming in has relevant experience in hernia, plastic and reconstruction, or implant-based biologics that have a mechanism of action and contracting profiles. It is a tightly aligned group with exactly the experience to guide us through this next phase. I have experience working with several of these folks in the past in different capacities, and to me it is a very good fit for what we need going forward.

Operator, Operator

Thank you. This concludes our Q&A session. I will pass it back to Tony Koblish for closing remarks.

Antony Koblish, Chief Executive Officer (CEO)

All right. Thank you very much, Carmen. This is an exciting time for TELA. We have a full complement of highly skilled commercial team members in the U.S. and UK, one of the only fully resorbable tissue-based portfolios on the market, more clinical evidence that clearly demonstrates the significant benefits of OviTex, a European business that is overperforming and can be a very good model and direct indicator of what is possible in the U.S. given time and development, and we have a new board of directors that is highly aligned with our mission and has the exact experience we need to achieve our next phase of growth. I also want to thank the TELA employees whose dedication and commitment to patients, which is most paramount, have created a strong foundation from which we can sustainably grow for years to come. Thank you very much. Have a great night.

Operator, Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.