Good afternoon, everyone, and welcome to our third quarter 2025 earnings conference call. Participating from the company today will be John Treace, Chief Executive Officer; and Mark Hair, Chief Financial Officer. John and Mark will discuss our third quarter financial results and updated 2025 outlook. We'll then host a question-and-answer session following our prepared remarks. Our press release can be found on the Investor Relations section of our website at investors.treace.com. This call is being recorded and will be archived in the Investors section of our website. Before we begin, we would like to remind you that it is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events and market trends as well as our estimated results or performance are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon currently available information, and Treace Medical assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. Please refer to our SEC filings, including our Form 10-Q for the third quarter of 2025 filed after the market close today, November 6, and can be found in the Investor Relations section of our website at investors.treace.com for a detailed presentation of risks. With that, I will now turn the call over to John.

Thank you, Trip. Good afternoon, everyone, and thank you for joining us on our third quarter 2025 earnings conference call. In our press release issued this afternoon, we reported third quarter revenues of $50.2 million, representing an 11% growth over the third quarter of 2024 and a 49% improvement in adjusted EBITDA versus the prior year. We also provided some insights on the market dynamics we have seen and are continuing to see as well as our revised outlook for the full year. Before I get into details on our results and outlook, market dynamics, and the execution of our strategy, I want to take a moment to recognize one of our directors, Richard Mott, who has chosen to retire from our Board for personal reasons. Rich has made significant and valuable contributions to Treace Medical throughout his time as a director, and we appreciate the expertise, insights, and guidance that he's provided to the Board and the company. We wish him all the best, and he will no doubt always be a friend here to Treace Medical. Turning to our performance. Throughout the year, we've discussed what a transformational time this is for Treace Medical as we continue to focus our strategy to evolve our business from a single technology Lapiplasty company to a comprehensive bunion solutions company. Building upon our flagship Lapiplasty and Adductoplasty systems, we have developed and commercialized three new bunion correction systems this year. We believe we're now positioned to address virtually 100% of surgeon preferences for bunion correction with five best-in-class instrumented systems spanning all four classes of bunion deformities. These are further bolstered by expanded commercial availability of several other new technologies to broaden our footprint in the foot and ankle market. To support this expanded portfolio of products and extend our customer relationships, we brought on a Chief Commercial Officer earlier this year, and we recently appointed a new Senior Vice President of Sales, adding leading foot and ankle sales experts to our sales team. We expect our growth to accelerate each quarter through 2025, particularly in the second half, given our new solutions and ability to target a broader base of surgeons. Successful execution of our strategy helped drive revenue growth in the third quarter. However, we also benefited from sales to a limited number of stocking distributors that we don't expect to recur at the same levels in future quarters. At the same time, we experienced pressure on Lapiplasty volumes as surgeon and patient preferences continue to shift towards minimally invasive osteotomies. In addition, we're seeing broader economic conditions and softer consumer sentiment leading to a greater number of deferrals of elective bunion procedures. These headwinds have continued early into the fourth quarter, which, as you know, has historically been our strongest period of the year. Given these market dynamics, we are revising our outlook for the full year. We now expect 2025 revenue to be in the range of $211 million to $213 million, representing growth of 1% to 2% compared to full year 2024. As the founder of this company and a large shareholder myself, I am disappointed in our results and that we are not growing our top line the way we had anticipated for the year. I would like to provide some additional insights on the drivers of our updated outlook as well as our focus areas as we move forward. First, I'd like to talk to our product portfolio and what we are seeing in surgeon and patient preferences. With our broader portfolio of products, we have now become a one-stop shop for all bunion needs, appealing to customers who use Lapiplasty technology and have established relationships with their Treace sales representatives. Our new bunion technologies have also allowed us to attract a new audience of surgeons who currently prefer metatarsal osteotomy procedures for the majority of their bunion cases versus our Lapiplasty solution. With our two differentiated 3D minimally invasive osteotomy solutions and our new SpeedMTP Great Toe Fusion system, we now have multiple opportunities to appeal to this surgeon audience. We are also seeing interest from some of these new surgeons adopting our flagship Lapiplasty and Adductoplasty solutions as well. During the third quarter, we experienced mid-single-digit case volume growth versus the prior year. However, case volume growth was still below what we originally anticipated and was largely driven by our three new bunion systems, which have lower average selling prices relative to Lapiplasty. While we believe this volume growth demonstrates that we are capturing a larger relative share of available bunion procedures, our system sales mix is shifting away from Lapiplasty, which has higher average selling prices, impacting our overall revenue levels. Furthermore, as we ramp up with our expanded portfolio of products, we are not yet seeing a level of adoption on Lapiplasty from new product surgeons that would offset other pressures on the Lapiplasty line. That said, we continue to believe we can achieve increased adoption over time. Second, we believe that, in addition to the change in mix, macroeconomic conditions and consumer sentiment are impacting our case volumes. In October, we conducted a survey with a cross-section of our surgeon customers, and the responses to date have indicated that, on average, their bunion surgical volumes year-to-date through October have decreased approximately 7% compared to the same period last year. This is consistent with what we are hearing from hospitals and surgical centers, which are reporting that outpatient elective surgeries are being deferred, particularly for commercially insured patients, and the more elective the procedure, the more likely they are to be pushed out. Third, I'll touch on the timing-related impacts of our strategy to shift our contractual arrangements with a limited number of distributors. With a new commercial leader and a new product portfolio, we have evaluated our selling strategies and saw an opportunity to enter into stocking relationships with certain key distributors, which we believe better positions us competitively in those markets. In the third quarter, in particular, we had a greater-than-expected benefit from this change. We recorded approximately $6 million in stocking distributor sales within the quarter, with about half of this amount being above our plans as our distributor partners responded positively to the availability of our new products and built inventory ahead of Q4 bunion season. While we are already seeing replenishment orders from our distributor partners, this pull forward of approximately $3 million in sales creates a headwind for us in Q4 as we do not expect this benefit to recur at the same level. Looking forward, we plan to continue executing our strategy with a focus on driving continued market share gains, accelerating our top line growth, and delivering improved profitability in 2026. To do this, we'll continue to train more of our 3,100-plus current customers on our new systems while also focusing on adding new surgeon customers. In Q3, one quarter into launch, over 20% of our surgeon customers have already adopted one or more of our new bunion technologies. As a technology and innovation leader in the space, we expect we will drive increased adoption of our best-in-class portfolio, tapping into more cases and expanding our procedure volumes with our surgeons. We are already seeing encouraging traction on this front with continued enthusiasm around our new systems and high attendance at our surgeon training events. Next, with a focus on strengthening our sales team's presence and procedural opportunities with surgeons, we plan to continue delivering a robust pipeline of new innovations expected to impact 2026. To highlight a few, our new Lapiplasty Lightning platform. This next-generation instrumentation is designed to further increase the precision and speed of the Lapiplasty 3D correction. As a reminder, Lapidus fusion, though lower volume than osteotomy, remains the largest dollar segment in the bunion market today. We have been pioneers and leaders in this segment, and we are committed to advancing our technology leadership and bolstering our competitive position in this market. Next, our Percuplasty compression screw system, which incorporates the innovative design features of our minimally invasive Percuplasty screw implants into a new line of compression screw implants. This provides our sales team a new core fixation technology, which complements our SpeedPlate platform. We believe the addition of this new system will further strengthen our sales team's ability to serve more reconstructive procedures throughout the foot and ankle. We will continue to offer new procedure-specific SpeedPlate implants and problem-solving sterile instrument designs, opening up incremental procedure opportunities, serving more procedures and helping our surgeon customers achieve better results. With new commercial and sales leadership, we plan to continue building upon the capabilities of our already strong sales team, adding experienced foot and ankle sales professionals with deep knowledge and credibility in the market to deliver increased productivity and impact in 2026 and beyond. Treace is known for innovation and helping surgeons deliver greater patient outcomes. As we move forward with our growing portfolio of offerings alongside our Lapiplasty solution, we expect our sales team to be better positioned to more broadly service existing customers and onboard new surgeon customers. Finally, while we navigate this period, we are already taking action to control what we can control with respect to our organizational cost structure and plan to evaluate levers as we move forward. We have a scalable business model and are focused on improving profitability and adjusted EBITDA while reducing our cash burn in 2026. With that, let me now turn the call over to Mark to review our financial performance.

Thank you, John. Good afternoon, everyone. Revenue in the third quarter was $50.2 million, an increase of $5.1 million or 11% over the prior year period. Growth was mainly driven by an increase in bunion procedure kits sold compared to the prior year. Gross margin was 79.1% in the third quarter of 2025 compared to 80.1% in the third quarter of 2024. Total operating expenses were $55.4 million in the third quarter of 2025, an increase of 8% compared to total operating expenses of $51.3 million in the third quarter of 2024. These increases reflect increased medical education, surgeon training events on our new bunion systems, restructuring charges, and increased litigation expense in the quarter compared to the prior year. The third quarter net loss was $16.3 million or $0.26 per share, an increase in our net loss of 6% compared to a net loss of $15.4 million or $0.25 per share in the third quarter of 2024. Year-to-date, net loss was $49.6 million, a decrease of 10% compared to a net loss of $55.2 million for the same period in 2024. Adjusted EBITDA loss for the third quarter was $2.6 million compared to $5.1 million in the third quarter of 2024, a reduction of 49%. This represents significant progress toward our improved profitability goals. Year-to-date, adjusted EBITDA loss was $10.1 million, a decrease of 54% compared to a loss of $22.1 million in the same period last year. Total liquidity as of September 30, 2025, was $80.6 million, comprised of $57.4 million of cash, cash equivalents, and marketable securities and $23.2 million of availability under the revolving loan facility as of September 30, 2025, compared to $90.7 million at the end of Q2. Compared to the prior year, cash usage decreased in the third quarter 2025 and year-to-date by 17% and 58%, respectively. Before concluding, let me turn to our outlook for full year 2025. As John mentioned, we are revising our full year guidance. We now expect full year 2025 revenue to be in the range of $211 million to $213 million, representing growth of 1% to 2% compared to full year 2024. Additionally, we now expect a loss in adjusted EBITDA in the range of $6.5 million to $7.5 million for the full year 2025, reflecting a 32% to 41% improvement over the prior year. We also expect a reduction in cash use of 43% to 47% for the full year 2025 compared to the full year 2024. Supported by a strong and flexible balance sheet, we believe we are well-positioned to continue executing our strategic and growth initiatives for the foreseeable future. I'll now hand it back over to John for some closing remarks.

Thanks, Mark. As we close today, I would like to reiterate that we are not satisfied with our results and that we are not delivering the growth we had initially planned for the year. However, looking ahead, we believe we are strongly positioned to drive market share gains with our new products, innovation pipeline, and ability to leverage our dedicated commercial organization. We remain a recognized leader in the market, and our team is focused on increasing our top line growth, improving profitability, and delivering value to shareholders. With that, let me now turn the call over to the operator to open the line for your questions.

Our first question comes from Lily Lozada with JPMorgan.

Can you talk a bit more about the softness in the core Lapiplasty business and how you're thinking about that trending from here? If there is a growing preference for minimally invasive osteotomy, do you think this is something that can turn around eventually? What could get this to return to growth if doctor preferences have just been shifting elsewhere?

Lily, John here. Yes, it's a great question. There's definitely a trend towards popularity of minimally invasive osteotomies, yet there is a segment of the market that is the Lapiplasty or Lapidus domain where you have significant bunion deformities, where we started in that market and built our business around that. Now we're going to go capture share in the minimally invasive osteotomy market and the MTP fusion market. These are significant volume opportunities for us. Right now, we're getting good market share penetration. We're taking competitive share in that arena, but it's coming at a lower price point. So the success we're having on the ground and in the surgeons' practices is not translating to the top line. That said, the reason we are doing this is we believe we can capture more customers and bring them into Treace and get them wherever they relegate the Lapiplasty procedure to for the Lapidus segment. Every surgeon has to do Lapidus at some point. There are deformities that are really severe or unstable and they have to use a Lapidus product there. So it's always going to be there. We just have to get more surgeons on board, and we're doing it using our new product technology and then pulling through the Lapiplasty. But to date, the Lapiplasty gains we're getting from those new customers aren't enough to make up for the softness overall that's coming at the trade-off of minimally invasive osteotomies to Lapidus.

Got it. That's helpful. And then I know it's still early, but I'm hoping you can share some thoughts on what this all means for next year. By my math, the guide implies fourth-quarter sales down 10% or so or 6% if you adjust for that pull forward that you called out. So is that how we should be thinking about at least the first few quarters of 2026?

Lily, this is Mark. I'll take that one. We're not providing guidance for 2026 at this time, and we plan to provide an update at our fourth quarter earnings call. But with that said, we're navigating a change, this transition that John talked about, and there are a lot of reasons why we are very optimistic. John talked about being the leader in the space, and we're growing case volumes. I think that's a really important point to focus on. Our case volumes increased in Q3 versus the prior year, and we fully anticipate additional case volumes in Q4 as well. So we've really been encouraged by the reception of these three new bunion systems. We've got more innovation coming that should impact 2026 as well, of course, our strong commercial organization. So we look forward to providing an update about the progress at our Q4 earnings call.

Our next question comes from the line of Ryan Zimmerman with BTIG.

This is Marie Thibault on for Ryan this evening. I wanted to follow up on the shift in preferences. I know this has been an ongoing shift, but have you noticed any acceleration away from Lapiplasty? I'm curious why this has become a larger issue in the second half of this year. Additionally, I’d like to understand the positive reaction to the three new bunion technologies. Is there a possibility for acceleration in that area? Is the sales team focusing on driving these products more quickly to help offset some of the shift away from Lapiplasty?

Yes, Marie, John here. Definitely, there is a trend with the minimally invasive osteotomy and minimally invasive foot surgery. That's why we're here. We're playing in that market with some really novel technologies, our Percuplasty System, our Nanoplasty System. Then there's another segment of the market that's the great toe fusion, and that can be about 20% of the overall 450,000 bunions. Osteotomies are 70% of the market procedure-wise, Lapidus is, call it, 30%. We're playing in all of these spaces now, and we're using the tools we have and extracting market share in our minimally invasive procedures while we work on next-generation Lapiplasty, and that will be there as a driver going forward for us as well. And what was the second part of the question that I missed?

Is the sales force focusing on these new products?

Yes, they are. Yes. Sorry about that, Marie. They absolutely are, and they're using it to drive greater penetration and greater engagement with their surgeons. We're seeing a solid uptick with the new products. We think that opens the door to present Lapiplasty to more surgeons and our Adductoplasty solution. So they absolutely are, and we're doing really well on that front. That's why we were talking about the procedure volume growth mid-single digits in Q3 that we expect to continue through Q4. If we can accelerate that, you do reach that point where the top line starts to grow again, and we'll be back on track.

Okay. Sure. That's really helpful. And then a follow-up here. You mentioned taking action to control what you can control. Any specifics that you can give around where you might be able to find some efficiencies on the P&L, things to kind of offset the little bit of a lower top line?

Yes, this is Mark. We have been and will continue to take steps to manage the aspects we can influence. If you review our financials, we reported a small restructuring charge in Q3 as we sought opportunities to make adjustments within the organization and improve our cost structure. We will keep assessing options as we proceed. Fortunately, we operate a highly scalable business with strong margins, and our focus remains on boosting revenue and enhancing profitability. This will definitely be a key area of emphasis for us.

I'm showing no further questions at this time. This does conclude the question-and-answer session. Thank you for your participation in today's conference. This does conclude the call.

I think we have someone in the queue.

We have someone now? We are sorry about that. We have Jayna Francis with UBS.

Just wondering, how would you plan to recoup some of those deferred procedures when you're going into next year? And then the second one would be just the puts and takes to 2026 qualitatively since we appreciate you're not giving quantitative guidance?

Jayna, this is John. Yes, the deferred patients into next year, our approach is now we have a lot more ways to get at the patient population and whether that's a little lighter or a little heavier. Going into next year, if we get a little bit of improvement in consumer sentiment, we continue to engage our sales team more familiar and more engaged with these new products as well as Lapiplasty. I think we set ourselves up really nicely to capture a larger share of more patients coming back into the front and having surgery.

I'm showing no further questions at this time. This does conclude the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.