SIBN - Earnings call transcript Q3 2020

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Operator

Good afternoon and welcome to SI-BONE's Third Quarter Earnings Conference Call. At this time, all participants are in listen-only mode.

We will be facilitating a question-and-answer session towards the end of today’s call.

As a reminder this call is being recorded for replay purposes. I would now like to turn the call over to Matt Bacso from the Gilmartin Group, for a few introductory comments. ahead. go Please,

Matt Bacso

participating for call. Thank in you today's

results me and Laura Jeff Officer A SI-BONE. released copy President XX, press ended and on Dunn, Officer; Executive of the financial Si-BONE today is Chief of and Earlier the Francis, XXXX. Operating quarter September Joining Chief are for release Chief available the Officer Financial website. company's

products, you hiring differ on place the include, and training anticipated the not assumptions. operating implant reliance results using These federal pandemic this that within Other I'd these implied that and whether actual the of and forward-looking made current desire trial recur the impact from statements management are the of statements and or certain company's active our Securities enrollment the involve future could based COVID-XX clinical and new in include of trends during without as are These statements will on future. risks in inherently that have materially for statements statements. contained pandemic of undue on ability statements. you and the are such like to those our the forward-looking system, statements or and will this events results Litigation expectations statements forward-looking or statements. remind call forward-looking and predictions relate based laws, expectations expectations reimbursement decisions to risks uncertainties begin, limitations, include events, pursuant we COVID-XX pandemic those to Safe the risks Before our physicians Accordingly, of will procedures of that which COVID-XX and duration Harbor Act securities the future and meaning by or iFuse These examination estimates the surgeons, significant call should that upon involve expectations, Any financial make to to uncertainties. undergo adoption, material XXXX. patients performance provisions Private current forward-looking various cause of are

of filed a For to list XX-Q of recent on any and Exchange report today, any XXXX. the Commission intention And as by the call Form financial of section conference obligation, information, disclaims except is as August and call with quarterly statements, revise with projections risks Securities XXXX. because forward-looking X and broadcast the our the please Jeff. with and most only information law, uncertainties contains refer I'll Risk required whether description update on business, to Factors SI-BONE or X, of events to turn that, or or accurate or November otherwise. time-sensitive future the new live the This over associated

Jeff Dunn

thank afternoon you Thanks, and for joining Matt. Good us.

is again healthcare our a diligently through while to we on normalcy. Before a quarter. the the the quarter of where we a first a $XX increase have XX% October revenue of to to the quarter, thank with cautiously third was This total details the community in compared pre-announcement returns revenue in into quarter get take employees history to million, XXXX. I COVID-XX, record essential X, company's continue the third In members who moment time of and the accordance million want of our for exceeded to work world $XX.X

than XX,XXX surgeons X,XXX During more the procedures, by surpassed quarter, we also performed worldwide. iFuse

only also at manage but operating revenue execute high a in reflected growth, our which expenses As organization, an we not losses. ability and to control our level, is continue to

to the surgeon been pandemic, had of eliminates This days the that early rates prior to simulator of the barriers the many platform reduce As impactful and that training we historically the adopt of were COVID-XX SI-BONE the during initiatives most we utilization of has has pandemic. innovative increased the one forced system. surgeon to rollout training overcome cost

medical team and surgeons. now exposure radiation on the lab, for eliminates demand, bypassing affairs our which reps train Our can surgeons cadaver

requirements part no physician Additionally planning. on reps, and the logistical travel of there overall which the are cost significantly and reduces

the driver from a the efficiency While has from perspective, positive positive this the reception key the company, for been surgeon an has been community.

to trained over our combined expect new The Specifically, as and and anatomy XXX surgeons on in well versatility, we trainings the using number well new extremely with well procedures relevant the future. train was we capability quarter received. male ahead is attract female the dysmorphic in ramping the many will which of more this has been surgeon system, capabilities ability of this remarkable expectations, options, several surgeons and feedback

surgeons targeting trained approximately and of completed procedure. a been United which States, the in X,XXX are We X,XXX have

have we a long So way go. to

enthusiastic days surgeons. the effectively which allowed XX trained, with over at our the target it simulators surgeons reengage last to the and has us surgeons be inactive ease can of reception and Given more new

plan we to end simulators result, up of XXXX. add of a As total by the XX to a training

over analysts as adult Whang. attended the might suffering SI webinar from the Clinic; addressed future the Brain from for Orthopedics Dr. course Fusion and Robert the has July, Panorama also the surgeon Medicine; the To-date, William attendees. well the for hold series and Spine additional SI webinar American Society's Dr. featuring Eastlack have have in School joint completed Maryland from Bedrock pandemic. Joint XX notably, we programs Pain, XX hosted of from potential Yale four on and programs invasive the procedure. led Annual Spine; the opportunity what and and XXXX. a well-received conjunction end Health. Tobler program October treat investors planned Peter to with we hosted for The spine and the we the an and Dix X, minimally very education of Meeting, Gary program XXX been diagnosis patients over Spine and Dr. who Spine also Our On panel of highlighted deforming. Dr. Scripps as North Dr. virtual in Mayfield a platform through Desai was over Bharat by of the underpenetrated Brain, Most fusion, The attracting from

total medical We residents have center brings fellows progress centers. This at continued also academic programs and medical [Indiscernible], our and the number training Boston UCSF, of Rush, academic other with University to are residents major XX approximately and trained training important using note of also these now centers to of academic the fellows. It's in resulted over Bedrock. which XX programs that XXX

We are and recently engaging scale the business involving included initiatives also have in purchasing projects which to automation more hiring.

processing accomplished million family Fusion. X.X adopted minimally into -- lives. other the States, the sales as of estimated to will for iFuse-exclusive Joint have of more invasive We where and coverage projects to without the goal has August scale with invasive focus order SI Medica, policy reimbursement of in The us solutions commercial compared is tailwind iFuse company continue the an across XX million exclusive approximately with covered XX the Fusion broad covered a United we in business based products. field coverage management. on not results an data lives. Joint this revenues have Minnesota, turned inventory projects widespread to United largest to to XXXX XXX is for enable minimally iFuse could these payers now with profitability the grow. Overall, for strength one our clinical automated the coverage including leading our Medica an policies efficiently, States of QX in We reimbursement SI On coverage and

us offering million. of the continue believe combined marketable follow-on our focusing October, we to completed from the the this proceeds that $XXX allow We cash securities of in with we quarter had proceeds will a growth. yielding third and at of driving $XX.X sustainable Lastly, offering on net million end

the from U.S. in $XXX Fusion. million payers, billion surgeon expanded in Specifically future. given the XXXX expand as was believe SI payment, private estimate the We year invasive a increase improved minimally position with to over coverage a the be market unique the landscape reimbursement per XX% we're to over the as for well insurance including Joint in we potential market $X little in

train invest As business field and engage process our We in awareness, we Joint invest leverage offerings of deformity profitability. this we initiatives market of be simulators to a plan in to in XXXX. the product current force, sales opportunity and patient initiatives sacroiliac systems beneficiaries market surgeons, in Fusion And and in the to intend trauma to scale expand improvements capture to leader growth will number grow our to expansion. the

of be systematically will will that the be throughout While introduced these to important investments made year. they majority note in XXXX, the it's

revenue As performance COVID-XX In the face continues quarter are remain not the and cautious our conclude, resurgence a we record do to of the growth. on fourth material our of cases. challenges, team operate uncertainty our half normally, and the of flu season surrounding about anticipate result, we but given these having impact second investments COVID-XX XX% To sales XXXX forecast. quarter third with the pleased a revenue we

business in Officer improvements to However, landscape and post-IPO With believe to financial will next will underlying results. now on in the support that we Francis, over in year. results from Laura the more Chief recent Financial call momentum the Operating our carry I Officer business that reimbursement provide into the our our turn and detail our Chief investments

Laura Francis

Jeff. Thanks,

additional were the Third accounted July total more increased XX% being XX% quarter strongest X% period. prior of throughout total revenue compared million to for million driven to normalized revenue the compared U.S. September the revenue of more by a We with our the approximately XX% year Monthly $XX.X $X.X compared ended increased the cases million rescheduled prior revenue of we International with that, increased from to believe trends month, the quarter of which quarter, year second of XXXX. period. evenly quarter, in distributed backlog. $XX.X period. sales prior year

to direct and also the the We with digits clinical specialists. backlog support XX quarter. We believe XX ended reps quarter contributed mid-single in sales growth

finish clinical personnel reps XX our to and specialists. at aiming XX direct and support sales We the are of have hiring XX to accelerated year to XX field

to margin active and XX% the $XX.X due operations the XXXX. quarter headcount Additionally, we due the of with of of gross decrease higher $XX.X in quarter support XXXX. increased primarily to million hiring. the XXXX. XXX higher from the third surgeons, growth third third quarter of second The from mainly of XXXX employee-related ended of quarter in sales of inventory compared XXX third compensation and to X% compared was of was the XXXX. expenses Gross business to in quarter XXXX stock-based million increased XXXX, in increase margin up costs the the third record higher the to third costs for a to in Operating to an Costs quarter in XX% of due quarter write-offs the in

action made product planned settlement primarily XXXX million of additional administrative lawsuit due in for was offset our launches XXXX. XXXX. third expenses of estimated and general research the in $X.X the class third by the quarter to of development investments The quarter of partly and also of reduction the increase the new for We in TCPA costs accrual in

Our to the operating of XXXX. quarter of million loss quarter in compared for $XX.X an operating third third of million was $X.X XXXX the loss

$X.XX offering to quarter. Our was follow-on net diluted Cash diluted of net of or expenditure Based were for in share a $X.X us plan, and XXXX To we our current further will strengthen in quarter XXXX. $X.XX or October end and a million $XX.X at and of loss our marketable enable our requirements. that third to marketable our of upon per expenses $XXX of of the balance believe net the per existing loss proceeds million $XX.X capital cash compared the the operating securities third sheet, operating as completed we million share fund XXXX. million securities with third quarter

recovery While over negative cases uncertainty in the out COVID-XX surrounding also flu remain was XX%, and fourth as growth fourth growth closing XX% difficult I'll at to of quarter to XXXX for the $XX With encouraged XXXX making of turn hospitals are our a call the in XXXX a important resurgence the business point season for strongest revenue. million, X% potential $XX of guidance to range year-over-year. globally. we comparison growth we impact Jeff that given those our approximately representing full quarter third the public and of rapid now quarter about on back and caveats ASCs quarter, the its comments. and year by cautious reiterating It's our over to company million

Jeff Dunn

the in business confidence of our than for us stronger for ever. is shareholders the closing, In Laura. front you in opportunity and Thank

initiatives, in will put more achieve accelerated increased market it importantly funding help joining an U.S., investment we our Direct-to-patient growth additional investment development in to expansion. the field And our and new the of established the we market. our initiatives personnel will plan. our and training, With in reimbursement we the be to of educate additional for time Most that help sales mission and many and are us have support today. surgeons, automation you the now points scaling the surgeon shareholders and call invest growth believe patients. the the as product strategy. focus to beneficiaries key broadly five leader, market With substantial Thank in that place is

will open We to now Operator? it questions. up

Operator

[Operator Instructions] Our from Morgan question David Lewis Stanley. line you. Thank of comes the first with

line Your now is open.

David Lewis

taking and the question. thanks for Good afternoon,

factor Just fourth start with me. little bit quarter. be October fourth factor in if relative that Laura think you Maybe just to kind business suggested with anything you help we September. think with you has comments trends most resurgence about on par a -- a a how resurgence. few quick been with to here November are for resurgence saw the pretty I in terms now your quarter? ones of companies And us And much here into of the wonder yet can appreciate you we're I the likely on but a your is what have in

Laura Francis

canceled Thanks third general did get to Obviously saw they perspective, that the can quickly you where certain in where just we month will then quarter very to of a online. be From about It's see we finished talk resurgence. try similar David. back cases October. we pretty hotspots the but

terms of started we've what starting out saw in quarter quarter. fourth very to so what quarter, that's similar trends a has the way in the we terms into in third And the seen fourth of in

David Lewis

was October And are if September? saying improvement sequential to relative comfortable a you Okay.

Laura Francis

even remarks the that the So July what of the did pre-stated -- is a -- that's cases in about and month. for was of of my reason stronger that I'm believe to cadence through all talked quarter, we I the saying make we backlog we third month during fact in we consistent comment in the do was even worked where And August compared perspective September. the remaining actually that and from

into And saw continue so, business in you? trends and and Jeff, other to more any October. a of September normalized we those from August comments see

Jeff Dunn

Well I strength would see to in U.S. that add we're just the continuing

We have your specifically David question.

have we We resurgence. little speak the seen bit to really a Europe. in in haven't any You U.S. seen of. We've asked anything seen

David Lewis

right Okay. a lot equity good because perspective. Very you then the had you And a pretty Jeff surprised clear you sheet from my balance offering money. look have and raised may some more

quick sort us that described then one organization people hit capitalized. investments and quantify number about be XXXX. well commercial I money just in reps triples expand. areas XX or people work back a situation adding you're jump talking and queue. And one can but commercial I But could you XX I how you So of curious where doubles some so But you're you that training, could to XX simulators. or won't of you commercial they organization for add putting to And we the surgeon the definitely where I'll in type I think XXXX? if could the to about simulator we gave XXXX. those some in number, mean, Laura appreciate maybe of know the

Jeff Dunn

mean we'll do the raised really as I sort step to -- wouldn't up year to in alone Laura Well of increase gas. compared David to get specialists. sales the XX field a XX XX support was have time reps money, We year. we We this this it and clinical feel said, didn't up we see XX, to force significant the if on to

it it there. for the and like regions actual as to number. give a out to sort the hiring now aggressive accelerated So right But of plan calls giving say, for more we pretty out significant little suffice It's guidance investment reluctant call an XXXX. I'm

on the from getting So into the side as simulators. sign going the mentioned XX be as product we And to to pretty surgeons see well pipeline continue we and interest are aggressive the strength rep to simulator as we October. well on tremendous up as

with So hyper in training. direct-to-patient then, and are we And going capabilities. encouraged layer sales of the reps we're to bookends more

been Next radio ads are that. start to on test week, some encouraged we've we're and actually that testing TV market going by

really we great those a together sort three So to up of set have XXXX. think things all

David Lewis

Laura, jump the I just early, mean, something queue. showing I but Okay. last I'll in business. your number And sequential I the in low back annualize XXs for in just momentum it's fourth quarter me if and get know and been you've I some

of So frankly aim much thinking terms XXXX I models? the or I kind look rate frankly at year next your in you'd on so if be improvement. of parameters the consensus Any sits XXXX on which comments Street for Thanks quarter, to fourth in assume annualized be we of XX-ish sort sequential where range, for any willing our The much. of offer about above should

Laura Francis

largest of fourth is David. works very And quarter the fourth that a quarter. we business obviously some the the the our is second the another the of business. way flat quarter. into in quarter a then the into at jump see a carefully Thanks, and And relatively first bit looking We're quarter, up into fourth there quarter decline little typically normally And XXXX. then the is jump seasonality third

business. guidance this because intention environment. But provide And our we investments in quarter next we the We're strength up. made difficult is bullish fourth in drive call we the are really to continue like our ultimately to more of ends so the where see to would seeing that on business, on all the even

offering. investments We are with making the the going additional from proceeds be to

be XXXX year. become in to productive our I for around a all said for fruit salespeople months impact don't made that are those to bearing XX the to going us next remarks, especially takes that for that think As significant that on we given but of have that XXXX, it we in my expect we pre-prepared investments

Operator

you. Thank

question Bob next the comes with from Bank America. of line Our Hopkins of

Your line open. is now

Bob Hopkins

Hi. and Thanks, good afternoon.

Jeff Dunn

Bob. Hi,

Bob Hopkins

oriented So the in but follow-up, for I we're it's unique environment here. apologize short-term a

like in it best that the the July quarter third was So sounds month.

So that midpoint kind QX guidance, the some that giving. Is from correct? do implied get implies you're get that to to QX to current the nice improvement see need of some of that to you to that trends guidance

Laura Francis

doesn't. grew that quarter. that my I from mid-single-digits. took in And cases you accounted remarks if the growth out by pre-prepared it saw we growth XX% rescheduled And we said as No, actually for in that the

approximately those just is without of say in quarter And in from XX% So, that order let's to were we guidance the we've for in provided. new cases. we the cases, fourth that growth rescheduled for the quarter XX% our terms to the XX% anywhere range provided the get numbers to growth

I because we are see but we of cautious underlying as that performing continue the quite is fourth similar well. into said we And the business So, are -- trends to quarter. starting COVID

Bob Hopkins

see. I

revenue you dollars. So, about year-over-year of terms more talking similar was in were thinking I sequential of terms growth. in

So, think-- I

Laura Francis

year-over-year is I'm No, what growth to. referring

Jeff Dunn

most and rescheduled of July. Bob And that rescheduled affected no There's were September. in almost those cases cases August

And it you ballpark-ish out so take the X% figure call if to there. it take mid-single-digit XX% and that math sort of, can of off you sort

and August were September chip very -- little still September So, was but good July. months in a there

Bob Hopkins

Jeff And and it. to your momentum Bedrock product? that your continued relative thoughts doing on with how's Got expectations

Jeff Dunn

XX institutions. more said That's than we're extraordinarily sort publicly Bob We're We in base bullish. number. academic we're of a -- that in

and from are trickledown as But we've academic break some to both as numbers the us cases be in ahead revenue at centers, getting the of the continue talked UCSF pieces of We've our of not are Mayo whole out into going as these things two great right that. thing. and ahead those to now. of numbers well Both We We're about expectations. our the done seeing that that expectations. just interest effect

it's think the as Bedrock will great revenue XXXX. expect of to in the vast, deformity trauma but pipeline from great our we in we base is Joint which a about in been things Fusion. SI product the there will the talked addition a as we And vast and Joint as majority company's be continue portfolio well lot more adult impress Fusion think and SI that of just area coming So, Still in we people momentum

Bob Hopkins

that pipeline does come incremental visibility when And Jeff?

Jeff Dunn

second the the product earlier in first be probably in midway product of Bob will part line the half The come early will sort of QX. part first year. to of half of second the closer And the the launched

both things good of to a are on cadence those there's track. very those So, there roll much out and

Bob Hopkins

much. very Thanks Great.

Jeff Dunn

welcome. You're

Laura Francis

Thanks Bon.

Operator

Thank you.

comes Our Genuity. the Canaccord Kyle of next line from with question Rose

Your now line is open.

Kyle Rose

Thank Great. you the question. taking much for very

general I question. to ask So, wanted just just of a more

given Just a financing. for chest executing the you've Obviously, war the been from trend well you perspective. recent increased

Is from XXXX the understand incremental make. how I about trying investments you're know going just growth realize return from I'm for groundwork But we think XXXX. see of Just it a current to allow for sustain period the laying on you in about should expect you to the growth acceleration going talked levels growth investment -- in to to should maybe to longer we time. to Jeff an these levels?

smaller from Just those from see or companies areas then investments. And material have of in view expansions struggle sales organization. rep how is level the perspective they hiccup we one high sometimes a secondarily when make or investments a a sales the you

and lot have? time. through maybe of You're manage predecessors process same dividing adding sure I don't on that that the those at do just to the some in of some issues of space realize the expect you how territories guess humans you make a that

Jeff Dunn

Yes.

questions Thank So, there's there really you. two Kyle.

a The people should quarter. of In as if growth. last We XX% first year, most I fourth last XX% high about or company. a a question were XX% this is sort do think level bold us be think growth at quarter we can were the I

little COVID, out could at if take but been have there would COVID, XX%. You we wasn't a probably

XX% is can all to about question. that so sales from investments. it surgeon we and product company get investments, the growth the That's these the investments XX% at that a level, the direct-to-patient happens force high when the training investments. investments, a So thinking call a we're company, growth Investments exactly

about the with guidance simulator and takes than We'll big get how time so Now to comes the better to as there, process four had stuff they The getting But products, making get earlier is some force. easily a they instead is the easier simpler market as into training given go of days, don't said so you sales and expected. next plane because know a high trained the a we opportunity these very year. that else. at going They on it And how making things, level have beneficiaries things hours is that you obviously as sure talked overall we someplace making a and the we they the there, few The with is whole growth can more that spend of you believe there. be more so do sure can we if with happy philosophically very and about the frictionless sure can for just that that we of create a grow to investment that more a market absolutely big are that with this get trained strategy the can within goal this that making frictionless more the environment. goes they're opportunity. payment effectively. And is sure environment create whole we is coverage surgeon will more surgeons

higher market things or the into year we're future. happens so grow really it's really a at growth the later make do these how we whether that rate But investments these thinking next in and And 'XX. about

down. And we second in are And that. it where so write that's didn't question philosophically your I

Kyle Rose

the of there's or to just through hiccup sure organization XXXX, expansion interim? about the your no potential the with make -- slowdown that thoughts in in managing sales growth around Just in

Jeff Dunn

the I the better Tony at think helm have we at could don't guy than gal helm Recupero. or a

team, think as type multiple single for doubled every I Tony that year one the sales you that it grew know years. basically

knows Tony Troy of His we about them think protection or the team the we They those talented management at the some were sales things sales that. Sales every get put Kyphon. VP for terrific, -- that sure financial Vice we the senior or there. like have the When U.S. I of supporting that financial because right we period area And powerful, the that team, in importance of many territories Presidents, time making current understand of sensitivities single are including His incentives our a changed and to very do you do how of in manage kinds they're field. rep do group. care overrides Wahlenmaier. of

as field so our Tony team them have are management the through confidence with the understands work sales frequent think And to team tremendous well very that in and I discussions And that. I we're trying in his how we surprise overall that $XXX to some secret. is business, million, that And market. this to $XXX coming. grow know the million, they We million people. a not It's get don't as $XXX do and

And so quite our is confidence level there good. really, really

Kyle Rose

you very question. much taking Thank the for

Jeff Dunn

welcome. You’re

Operator

Thank you.

Turkaly comes Our question from Securities. Dave next the line JMP of with

is line Your open. now

Dave Turkaly

Great. Thanks.

any And impact of anything ASP on had Thanks. might adoption had given on You have might your stand faster on XD you commentary. out COVID comment just called we with else iFuse margin in ASP that have also now? that everywhere then was or could gross And I today? where wondering is

Jeff Dunn

to do and jump take Laura, in you want Yes. one? this

Laura Francis

Yes sure.

uptake the XD particular planning originally in inventory. to strong gross And we quite write-offs because very have from did for iFuse were it sales about of a of seen sales, XX.X%. some margin of I have we we talked closer approximately iFuse it's perspective the XX% frankly, So XX% XD. and iFuse iFuse

So anticipated. successful than more rollout we of had that there's been a product even

doesn't it significant a ASPs impact of ASPs. terms have really In on

of So business. the it's a good been transition

Dave Turkaly

and like. failure at thoughts doctors fixation provisions just I rates, And pelvic I have from of of I'd a different like people lot. as seems of talking to guess devices quick sort get different backouts the your a but where that the stands are the And guess like about a event competitive NASS your numbers today? heard we couple it a couple issues. Thanks Because certainly follow-up more

Jeff Dunn

our characteristics think the rates Fusion, David it and sales there was with rates XX%. spine XD, in are down know cases. and you the different a are seasoned to XX,XXX because its learning first its Joint most out Well, are the iFuse XX,XXX more And a published have cases as and and I And over more areas. curve over revision break of SI over into force. you X% little that where currently revision porosity

are revision Our more a than little rates X%. running

with So I can't products product, think to of some tremendous imagine capabilities. rates. it I the porosity of the fusion the of those has they're its with have kinds nothing do that competitive published They but

And When and referring revision about compared move SI adult Bob think top the and I in competitors very, the is think the that's to some joint at ISSG of really the who with study, so that deformities fusion, I – you're positive. of which breakage Eastlack, and I it's of that very are bottom with surgeons talked that levels some to rates on those to the increase XX you think rates And surgeons guess with in like for about down. I we're very adult XX% revision focused confident XX%. to Bedrock very, revision confident. deformity stabilization, were think evidence. is very I going rates cases a go running The And XX% something are or that clinical the top very

of pole. talked the surgeons bottom the it's of and flag So I putting all like at to think foundation you have the

of not flag of you one, at have kind a bottom action you're pole. lever good the really put If going to

we'll by end XX having natural year. And time. over to I so but and and the it's in study SILVIA don't maybe now in We're we're even it's effect we get real get study. positive I enrolled the there XX think of trying might. I think We're think investing the to a very very patients that

the So almost because we clinical everything. think of foundation evidence is in that clinical evidence we're investing

David Turkaly

you. Thank

Jeff Dunn

You are welcome.

Laura Francis

Thanks, David.

Operator

Thank you.

the from of next Brandon Cantor Fitzgerald. Our Folkes comes question with line

open. line is Your now

Brandon Folkes

and a did this. thanks for apologize my first great you on taking question and Maybe if Hi, I congratulations answer quarter.

feedback of why were just was policy for bunch can you in second provide the direct-to-patient question, little reimbursement, then asking – a maybe potential On update? the bit And any you. my terms not questions your did included of I Thank Anthem in a they marketing? about talk you

Jeff Dunn

Sure.

don't I a told piece, on it, their So to so and we them that not on guess talked about they told Brandon, certainly surgeons drag they because know. a us to was just the something they do expected whether get COVID thing didn't feet, we I Anthem as or but

QX given don't been missed review it's even next have to though in or very I We We've be even reviewed it's the have timing know that told will year. communicated. good I'm say going communication the whether had I QX future. that to QX I'm and what it to reluctant be under – or deadlines is a feeling. they've say. but they've reluctant that's

lives, but I the shouldn't it's be to control And to a have think think that know million to question come we know there's right The can't they that there's anymore. payers covering. clinical spectacular with and these against I patient we went grew why States that they XXX earthly at of we on I no XXX And United and we decision evidence by patients. and time. hope XX% the and is reason And look that would hold lawsuits Anthem. I just help multiple in

done there's number lot As some that there's to patients a XXX it's that. on do that a that the to huge there we're among patients in understanding homework, direct-to-patient lack of and population of and when good or think there a but gone broad out patients XXX early solution. year really of a a out think there's of the out We we initiatives, talked – we've really

they so state they often but it, do in they And doctor I to election given that And direct-to-patient we pilot delayed the set it's we're is few on where the in that up talk that of in and that the a go swing any there's goes think cities call we're these ask so we'll them time choices we measure it's from more go we're future. We're or go multiple to. hoping cities. of time cost But And give that us. center now many political that about -- and call particularly TV think have a cities X and we next initiatives. area. the lot they coverage well in a out going I ads. test the heck and and I to direct-to-patient going can good surgeons starting think And about patient because the initiatives of see call week, we a and optimistic that can November Or

Brandon Folkes

you very Great. much. Thank

Jeff Dunn

welcome. You’re

Operator

you. Thank

of from Krum question Kaila Truist comes Securities. with line next Our the

open. is now line Your

Kaila Krum

Hi, everyone. our Thanks for question. taking

that Kyle's SI-BONE So about response question you going XX% guys I company to think forward. we in growth mentioned think should a as

expect want XXXX? the on XX% just low simulators. is training So, make in follow-up sort a And what a sure I bar of should to perspective of comment. that I guidance mean, from we on the And I'm I clear then have

Jeff Dunn

wasn't clear I Kaila. Maybe Yeah.

company of I think kind growth we're now. sort a of XX%

who the about XX% resurgence year in QX knows of quarter fourth there's and the we're this Now in But the quarter last exactly. that XX% quarter i.e. fourth if the we're year. in COVID talking

of think and quarters company in sort is how XX% of us improve future. the we're a the in growth about we do of talking the range as I in that investments rate growth that now,

Laura Francis

hiring quarter what the that in made if similar you now went doing about since the certainly significant lot company investments simulator the we public, although we We efficiently. more first Kaila to public did The a went public at think of gives some in what ability training and the sales more time by rapidly company, organization that force. surgeons the way we in the we grew people train surgeons were the us the XX%. with a obviously to of And with we were

on longer. an of reimbursement, New really product much development any we were is us for which issue working not

in as of in So XX% quarter as Jeff said, that perspective we we to grew QX public the from first growth XX% XXXX. were

we the that or -- sales grow challenges big at and when able percentage. reimbursement put to we sales the happen the sales little running was is they -- difficult as was rep There they have seeing time when patients. now as where a those were the training, rep business getting ground There exactly to a the certain And relationships how reps to reimbursement rep. perform to were surgeons strong was do, to territory. diagnosing going first of what case, that quickly What's sales beyond how that do field where regularly by for whether see us entered did reason And so reproducibility raise into it. how to do is we that for to to we that were really we're had a the the point able why with financing were coverage to developing additional that is, payment continue beyond in know we reimbursement, question the a the that due and reps with what more we start it them others and sales particular was going territory. and very predict with we hit to new we're we in getting variability size We of And the them have that in it ultimately the mainly this treating surgeons, perform. the those their getting placed

what you to with of your really And the the in model partly can grow training just the is that of well. then sort us. productivity surgeons. front how we and business shows additional so and this, do, of process And continue do growing And as hiring salespeople of it it's part

to put do to where ability the to into in us growth growth this we much accelerate beyond gives how currently. drive say, really at want business we're it order So, and future

Kaila Krum

that. of on It And a the evenly, of rolled sense. talk of XXXX? I add to hiring will I'm want I like then more clear simulators I sort first, you make training to business. sounds but the they'll just of some ton then imagine And these sure layer out just of throughout these a the be efficiency be I guess but scaled cadence simulators kind the couple you about reps, can mean, on simulators. mentioned year in makes That pretty Okay. how

your again big order efficiencies just in those ultimately Thank So, mind? address of how to do be sort opportunity needs to guess, with sales think force I longer-term you you. in the broader

Jeff Dunn

the give first I'll second. question. the Laura take Okay. I'll

the and is out plan a the will So -- to roll bit them all in QX. simulators QX in

investing So not no be going early Kaila. things. they're scattered We're to on those

sure latest. So we by at that the the all the have end will I'm in June of field XX-plus-percent them out

a So second take that's do and And Laura the first sales standpoint. think. business from rep around size you of the the question -- the want I to

Laura Francis

you Sure. were Yes. efficiencies in getting Kaila And I at the business. think

involved. But our sales surgeons, involves education is definitely So the rep it primarily train when organization. we professional

XXXX And so United what are is, surgeons target trained. this not that are us in have yet the been for does that around States there

surgeons. with train what to so, to this allows those And the simulator us more is rapidly do

at it In the of productivity very of look we still way in a the terms sales similar force, however.

territory, And in we specialist either a then a bottlenecks And there's the because rep can rep of that a support business. -- think million a cases. $X.X just covering bottlenecks. in the of clinical it's do plus or do can a they clinical do and -- So we with two million different of a cases just sales is, business. specialist rep $X our sales they around approximately are pretty much have one support all And with

The coverage performing other cover in who territory. have in bandwidth surgeon the the to the and these order surgeons particular sure one reps is, sales that the their making are just procedures

business be doing supported we say, specialists. support business. that our usually sales We reps a size where organization. have a we with we're -- think think simplistically about business when would size What let's of $XXX our about they is clinical million would and of XXX So business sales of the and of the by business with XXX

Jeff Dunn

surgeons. difficult only new other seeing about number like the the inactive challenge simulator XX% about on very to that call we are add coming out a on I've and of give day also of just simulator. The inactive trained days, on that with significant are I'd getting with is, talked not these the you something training surgeons. It simulators X.X plane how Kaila what a I've of being a We're talked office. surgeons. But this would was would of surgeons plane received. we getting trained some getting XX%, to thing, are new flavor only a of surgeon be taking predict their and out a others the surgeon And surgeons

they gotten didn't maybe, pricing used have or to they've Maybe coverage didn't payment is. it So the it. the like whatever they

group. the focused there's who in And of good more up team So not trained number the than is active on the surgeons a lot active we QX out team, are but there put affairs very field we've that. significant on very surgeons the number a medical

surgeons. back And also active to addition people those training initiative of and major so lots is in getting new a

Operator

you. Thank

question line Needham. comes of David Saxon from the with Our next

Your line is now open.

David Saxon

Jeff for simulators. taking a on follow-up just and had I Laura, thanks the question. my

into this pool trained over simulators now. in that? should this many incremental XX field the the the perspective I wondering think just You noted And XXX of how docs you've from about a is how simulators have training in that docs? we field you on was XXXX

Jeff Dunn

mean I now. handful there a we out Yes. less than have say, let's

surgeons So guidance we there'll put out handful to a from I going active trained, team couple simulators obviously of pushing But a affairs help that into to etcetera, plan number of think David less training for the than a out a XXXX. surgeons the for or transit be reserve out But to in on with ready the and don't the to are medical in and those etcetera. regions field. adding we XX

a math blip in there's QX. cool. big it in pretty sudden of we let's momentum math-wise, this So a with the continued you saw October, go, bit all And do this We could is hey little And think was a, don't simulator. there. of

I continued momentum to already. and training seen October the we that have see in think with we're going

time and year. not to getting conservative to possible times, them course hence those has there, It into are Kaila's going doesn't documented. we takes their but are on soon train the pushes it next getting and as get question, push – patients manufacturing of have as back because have right away half Of because things mean of surgery first of out there to lead given just be to to and the there talk because patients policies coming as sequence – out care about you a the surgeon, are that that they're

So half perhaps, next back see benefit we way. the significant year in a some could in

David Saxon

proposed I flattish. or think I kind helpful. joint fees. correctly And doc Yeah. the fusions just SI on decrease. conversion factor the reimbursement are The I looking set for And That's of to if question was is it – RVUs then at a

Do think growth know, you're you investments reimbursement for dynamic? at ton trajectory I that How of all? – next year. just thinking this the are a you So about making impact will

Jeff Dunn

I don't think at so all.

hey, – surgeons studies talked of think in the we'll money think think January make out. know up, any have talked say, very of anyone that payment's it's I haven't and on do think the don't I heard as procedure. we back think have surgeons to low you difference. surgeons, or I I on and doesn't The the the I But since heard clinical it's right relative a don't to year, how see, about, more changed patients all the it's wise. plays whatsoever. too I all think this Laura Xst. And dollars think And I makes highly I I well, and here think don't difference than geography any picture, there few big it has it's in it

David Saxon

and so congrats Thanks the quarter. much Great. for

Jeff Dunn

you very much. Thank

Operator

like to This now any question-and-answer I would remarks. Mr. you. for further the concludes session. call back Dunn turn Thank today's to

Jeff Dunn

Great.

in everyone and good put we a very have year a plan We quarter. the recovery very to team the growth very thank the for excited thing initiatives through XXXX. place. are Just and for joining. a all pleased about worked how you into with Obviously, think rest great we for the power and together We're we've the quick, this of

again, of thanks And So joining. for you, have day. a rest Thank the good Sarah.

Operator

participation. your call. concludes Ladies and for Thank conference today's gentlemen, this you

day. Everyone disconnect. now may You have great a

SI-BONE (SIBN) 2 Nov 202020 Q3 Earnings call transcript