SI-BONE Q3 2026 Earnings Call Transcript

SI-BONE (NASDAQ:SIBN) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

SI-BONE Inc. reported a 15% increase in worldwide revenue to $55.7 million, with U.S. revenue rising 14% to $52.8 million, driven by a 20% increase in U.S. procedure volume.

The company launched the Onyx product in October, with early demand exceeding expectations and tracking ahead of Granite’s comparable launch period. Onyx has the potential to significantly expand SI-BONE’s market to over 650,000 procedures annually, representing a $5 billion market opportunity.

SI-BONE reaffirmed its 2026 revenue guidance of $231 million to $233 million, implying over 20% growth in Q4, driven by strong procedure demand and favorable reimbursement changes.

Adjusted EBITDA increased by 32.4% to $3 million, with operating expenses growing slower than revenue, showcasing operational efficiency and strong financial performance.

Management highlighted the importance of innovation, with new product launches like Onyx anticipated to drive long-term growth and increase market penetration, particularly benefiting from recent reimbursement enhancements for multi-level spinal fusion procedures.

Full Transcript

OPERATOR

Good afternoon and welcome to SI-BONE’s third quarter 2026 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 Saqib Iqbal, Vice President, FP&A and Investor Relations, SI-BONE, for a few introductory comments.

Saqib Iqbal (Vice President, FP&A and Investor Relations)

Earlier today, SI-BONE released financial results for the quarter ended September 30, 2026. A copy of the press release is available on the Company’s website. Before we begin, I’d like to remind you that management’s remarks today may include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, such as our most recent Form 10-K and Form 10-Q, and actual results may differ materially from any forward-looking statements that we make today. Accordingly, you should not place undue reliance on these statements. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law.

During the call, management may also discuss certain non-GAAP measures, including adjusted EBITDA and free cash flow. Unless otherwise noted, any reference to profitability is in terms of positive adjusted EBITDA. For a reconciliation of these non-GAAP measures to GAAP accounting, please see the Company’s full earnings release issued earlier today. Unless otherwise noted, all results are compared to the comparable period in the prior year. With that, I’ll turn the call over to Laura.

Laura Francis (Chief Executive Officer)

Thanks, Saqib. Good afternoon and thank you for joining us. We delivered a solid third quarter with accelerating procedure demand, broader physician adoption, and improving financial performance. These results reflect disciplined execution of our multi-year strategy to expand our differentiated platform into new clinical applications. By focusing on anatomy-specific solutions that enable durable fixation and fusion in patients with compromised bone, we’re reaching more patients and expanding our growth opportunity.

Worldwide revenue grew approximately 15% to $55.7 million. U.S. revenue increased approximately 14% to $52.8 million. U.S. procedure volume increased approximately 20%, supported by 16% growth in active physicians. The strong double-digit volume growth across all procedure types demonstrates that our targeted platform expansion and call point diversification strategies are delivering. In addition to the strong surgeon demand in the third quarter, demand accelerated for our expanded INTRA platform from interventional spine physicians in the office-based and ASC sites of care.

Our decision to build differentiated solutions with applications across all sites of care has made INTRA the preferred platform for this call point. International revenue grew 27% to $2.9 million, supported by continued adoption of technologies launched in the last 12 months. We converted the revenue growth into stronger financial performance. Adjusted EBITDA increased 32%, more than twice the pace of revenue growth, while working capital discipline contributed to stronger operating cash flow. Innovation remains a key component of our long-term growth, and as we developed differentiated technologies to improve procedural outcomes for high-risk patients with compromised bone quality, we pioneered minimally invasive treatment for SI joint dysfunction and applied that experience to develop breakthrough devices targeting sacropelvic fixation in complex fusion as well as pelvic fragility fractures.

With the recent launch of iFuse Bedrock Granite and Onyx, we’re now taking that proven expertise in developing anatomy-specific solutions beyond the pelvis. Onyx received FDA 510(k) clearance in September and is our third product to receive FDA Breakthrough Device designation. We believe Onyx, which is designed to address the known failure points at the upper and lower ends of the spine fusion construct, represents one of the most significant product launches in our history.

The addition of Onyx increases our estimated total addressable market to over 650,000 procedures, representing an annual total market opportunity of approximately $5 billion. Onyx is the first of several differentiated technologies that we plan to bring to market that address significant unmet clinical needs and where our expertise in compromised bone gives us a clear advantage. We initiated the alpha launch of Onyx in October and are extremely pleased with the surge in interest.

Early demand is tracking ahead of Granite over the comparable launch period. While we expect a modest contribution in the fourth quarter as we move to full launch, we see Onyx as a meaningful accelerant to long-term growth. Recent reimbursement enhancements have added another long-term growth catalyst. New DRGs for multi-level spinal fusion procedures that incorporate pelvic fixation with Granite took effect October 1st. Depending on patient diagnosis and severity, the increase in the average hospital payment could be up to $50,000 per qualifying procedure. We believe the reimbursement framework will enable physicians and patients to access our Granite platform, further extending our leadership in the nearly $1 billion target market and allowing us to potentially provide additional solutions such as Onyx in these same procedures.

Together, these developments mark a defining moment for SI-BONE. We’re substantially expanding our addressable market, the new DRGs have created a more favorable reimbursement environment, and we have a highly engaged physician base, all of which give us confidence in delivering durable long-term growth. That confidence is also implied in our 2026 guidance, which at the midpoint would imply over 20% revenue growth in the fourth quarter. I will now discuss our three key growth drivers: innovation and market development, physician engagement, and commercial execution. Anshul will then cover our fourth priority, operational excellence, inside our financial results and outlook, starting with innovation and market development. As the U.S. population ages and lives longer, osteoporosis and osteopenia are becoming more prevalent. This creates a growing need for advanced technologies that enable durable fixation and fusion in compromised bone.

We believe our biomechanical expertise in developing anatomy-specific technology gives us a competitive advantage that is difficult to replicate. Our Granite and Onyx platforms are clear examples of our disruptive innovation targeting known failures in complex fusions. Granite was our first major platform targeting failures in complex fusion starting at the base of spinal fusion procedures. In the last four years, we believe Granite has become the standard of care in sacropelvic fixation. Onyx expands our complex fusion platform by addressing screw loosening at the upper and the lower instrumented vertebra, another major challenge in spinal fusion.

Published literature reports screw loosening in as many as 27% of spinal fusion constructs, with higher risks in patients with osteoporosis. We’ve done this before. In the randomized SYLVIA trial, adding fixation across the SI joint alongside S2AI screws reduced new-onset SI joint pain from 8.5% to 1.1% following deformity surgery with Granite. The Paulus study showed a 3.3% pelvic fixation failure rate at 12 months, compared to a 23.7% failure rate at two years reported for traditional pelvic screws in large deformity databases.

With Onyx, we’re bringing that same osseointegrative approach with the goal of delivering similar results. Onyx is one of the most technologically advanced solutions we’ve developed. We believe the anatomy-specific thread design and implant stiffness tailored to varying vertebral bone density promotes early fixation, which is crucial to reducing implant loosening, and also facilitates long-term bone integration. We estimate the market for Onyx at approximately 200,000 annual U.S. procedures, representing a market opportunity of approximately $1.5 billion.

Combined with Granite, our total market opportunity in complex fusion now stands at approximately $2.5 billion. Onyx will also benefit from our substantial commercial footprint and large presence in complex fusion procedures. When Granite launched in 2022, we had over 700 active physicians and we were in the early stages of building out our third-party agent network. Today we have approximately 1,770 active physicians and over 300 agents. In the first few weeks of the alpha launch, Onyx is already generating incremental procedures within our existing accounts, while higher implant utilization is increasing overall procedure average selling price.

As more surgical capacity comes online, we’re confident that this commercial reach will accelerate Onyx adoption. From a reimbursement standpoint, depending on the number of levels fused and additional technologies being used, the new DRGs I highlighted earlier may also benefit Onyx, especially in qualifying long spinal fusion cases. Additionally, as a Breakthrough-designated device, Onyx is eligible for the Alternative Pathway for a New Technology Add-On Payment, or NTAP.

We’ve submitted our application to CMS, and if approved, the NTAP would take effect on October 1, 2027. SI joint fusion, our largest market for minimally invasive surgical procedures. Our actions to broaden our portfolio and expand physician call points to also include interventional spine physicians are delivering results. Our comprehensive portfolio serves both call points across all sites of service and extends our reach to a broader subset of patients. In the third quarter, surgeons accounted for the vast majority of procedures, but adoption of the INTRA platform among interventional spine physicians was a significant contributor to procedure growth.

We believe INTRA has established a leading position in SI joint fusion among interventional physicians, supported by our comprehensive portfolio, clinical evidence, and training programs. Proposed CMS reimbursement changes could also strengthen demand for our solutions in this market. Under the proposal, hospital outpatient and ASC payments would increase to more than $20,000 and $16,000, respectively, and new office payments of $20,000 for CPT 27279 would be established.

If finalized, these changes would take effect January 1, 2027, improve procedure economics, and expand patient access. We expect CMS to issue the final ruling in the coming days. In trauma, we continue to collaborate with Smith+Nephew on surgeon awareness and education to treat sacral insufficiency fractures using iFuse-TORQ TNT. As we enter the busy season for trauma, our joint commercial actions over the last six months are starting to deliver, as we’re seeing growing adoption of our platform.

Looking ahead, we’re advancing several programs targeting large, established markets with significant unmet needs and high procedure failure rates. These solutions apply our compromised bone expertise to new clinical challenges and build on existing physician relationships and commercial infrastructure. By organizing our innovation around the needs of these high-risk patients, we remain committed to improving procedural outcomes. Now turning to physician engagement, we ended the quarter with approximately 1,770 active physicians, representing 16% year-over-year growth. We’re proud of our double-digit physician growth in every quarter for nearly six years, which we attribute to the impact of our innovations that is improving patient outcomes, the quality of our targeting activity, as well as the prudent investment in physician education and high-quality clinical research. Given our sizable installed base, we’re also focused on deeper physician engagement to increase the number of cases per physician.

While we continue to see steady increases in the number of physicians performing multiple procedure types, Onyx has the potential to materially accelerate this trend. Even in this limited launch period, Onyx is already driving an increase in the number of cases, as well as the increase in the number of products used per case, among existing Granite physicians. Next, let’s turn to commercial execution. We ended the third quarter with 93 quota-carrying territory managers. Our trailing 12-month average revenue per territory was $2.2 million, representing 7% improvement. These productivity gains reflect the operating leverage in a hybrid model strategy as our direct team focuses on physician education and relationships, while third-party agents extend procedural coverage and market reach. We’re targeting to exit 2026 with nearly 100 territories.

The added field capacity will allow us to capture the anticipated Onyx demand, deepen physician engagement, capitalize on the interventional momentum, and prepare for future launches. Before I hand it over to Anshul, I want to thank our colleagues for their dedication and execution. I especially want to recognize our teams involved in the development and launch of Onyx. I also want to compliment our Market Access team, whose work helped secure the new Granite DRGs. Onyx marks the beginning of our next wave of innovation, and I’m excited about what we can accomplish. We’re helping physicians treat thousands of patients and improve their quality of life.

Now Anshul will discuss our financial results and outlook for the rest of the year.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Thanks, Laura. Good afternoon, everyone. Our third quarter results demonstrate our ability to drive strong procedure growth, improve profitability, and generate operating cash while investing in future opportunities. Let me provide additional details on our financial performance, starting with revenue growth. Worldwide revenue was 55.7 million, representing 14.5% growth. U.S. revenue increased 13.9% to 52.8 million, driven by 19.5% procedure volume growth, partially offset by lower average selling price.

The robust volume in a seasonally slower quarter for the industry reflects the benefits of our strategy to build a diversified portfolio serving both surgeons and interventional pain physicians. With nearly 650,000 annual target procedures that can benefit from our highly differentiated technologies, we believe we are in the early stages of accelerating procedure volume growth. The ASP was impacted by procedure mix, which drives the average number of implants per case, as well as the site-of-care mix.

As our Intra platform adoption increased in faster-growing ASC and in-office settings, which typically carry lower ASP, international revenue increased 27% to 2.9 million, driven by growing TORQ and TNT procedure volume. Turning to profitability, gross profit increased 13.7% to 44.2 million. Gross margin was 79.3%, continuing to track ahead of guidance. The minimal change in gross margin reflects the site-of-care and procedure mix I highlighted earlier, partially offset by the improving surgical capacity utilization and implementation of production workflow changes to reduce implant costs as well as optimize instrument costs. Operating expenses increased 9.7%, well below revenue growth of 14.5%, demonstrating our ability to scale efficiently.

Higher spending reflected sales commissions, marketing activities to support new products, and continued R&D investment. Based on the trends through the first three quarters, we believe 2026 operating leverage will be better than our expectations at the beginning of the year. Net loss narrowed to 3.6 million, or $0.08 per diluted share, compared to a net loss of 4.6 million, or $0.11 per diluted share. Adjusted EBITDA increased 32.4% to 3 million, representing an adjusted EBITDA margin of 5.5%.

Over the trailing 12 months, our adjusted EBITDA increased approximately 140% to nearly 13.6 million, and adjusted EBITDA margin more than doubled. Going forward, we expect strong revenue growth and continuing operating leverage to drive further margin expansion and move us towards GAAP profitability. Turning to liquidity and cash flow, our working capital discipline and asset-light operating model are converting improved operating performance into cash. We ended the quarter with 146.3 million in cash and equivalents, up approximately 400,000 sequentially. Year to date we generated approximately 4.4 million in operating cash flow compared with 2.4 million used in the prior-year period, an improvement of 6.8 million. Our robust balance sheet and progress towards consistent free cash flow generation positions us to fund our planned development programs while maintaining significant financial flexibility.

Turning to 2026 outlook, we are reaffirming our 2026 worldwide revenue of 231 million to 233 million, as well as our gross margin expectations at 79%. While we are making growth-oriented investments related to Onyx launch and ongoing R&D projects, based on the year-to-date performance we now expect our operating expenses to grow 10.5% versus a prior expectation of 12%. The midpoint of our annual worldwide revenue guidance implies over 20% year-over-year revenue growth in the fourth quarter as we enter our seasonally strongest quarter.

Our fourth quarter growth acceleration is anchored by the strengthening and broad-based procedure demand, a growing base of active physicians, an expanded commercial footprint, and modest contribution from new products. The new Granite DRGs and a broader rollout of Onyx offer additional growth potential both in terms of volume and procedure ASP upside. Early indications from these catalysts in October reinforce our confidence in a strong finish to 2026 and significant operating momentum entering 2027.

With that, I will turn the call over to Laura.

Laura Francis (Chief Executive Officer)

Thanks, Anshul. We’re entering our next phase of growth with a differentiated portfolio, deeper physician engagement, and a more favorable reimbursement environment. We’ve built the commercial scale to capture these opportunities, and our results demonstrate the operating leverage that growth can deliver. Looking ahead, we’re very confident in our ability to accelerate growth, improve profitability, and help more patients achieve better outcomes.

With that, we’re happy to answer your questions.

OPERATOR

Thank you. If you would like to ask a question, please press star-1-1 on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself, press star-1 again. We also ask that you wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question will be coming from the line of Patrick Wood of UBS. Please go ahead.

Patrick Wood (Analyst)

Beautiful. Thanks so much for taking the questions, guys. Just two up front. First one on Onyx — you know, obviously in alpha launch at the moment — but I’d love any extra color you guys have from the clinician and surgeon feedback. And if you’re going to change anything as you go into full release, anything you’re going to tweak — just feedback there would be great. And then secondly, you know, big picture you mentioned several times obviously accelerating procedure growth.

You know, Q4 — the implied guide is for a nice acceleration. You know, how much is Onyx going to keep that momentum as we move through into next year even before the NTAP actually comes online? Thanks.

Laura Francis (Chief Executive Officer)

The answer is yes to that question, so that’s number one. Number two, we wanted to see if physicians that are using Onyx are using Onyx when they don’t go to the pelvis where they typically don’t use Granite, and the answer is yes to that as well. And then finally, we wanted to see if non-users of Granite are wanting to use Onyx, and the answer is yes to that question too. So we’re really excited by what we’re seeing here just in the last 30 days or so.

So there are early trends, and all of the things that we talked about in terms of increasing procedure volumes and seeing implant utilization per case increase with Onyx is happening in the early stages. Also, what gives us a lot of encouragement is Granite has been a huge success for us. And when we compare the demand for Onyx to the early demand for Granite, it’s actually tracking ahead of where Granite was as well. So maybe not that surprising because we’ve built such a strong number of physicians who are using our technologies. Once again, as I said in prepared remarks, we had around 700 physicians that were active when we launched Granite and now we’re at almost 1,800.

And also just the footprint that we have in the United States as well, with the larger number of territory managers and territory reps, but also our third-party agents as well. I think all of those things are really important. So the excitement is really evident with our commercial team. We have actually quite a bit of inbound demand already for Onyx. And so, for us it’s really deploying additional surgical capacity out there in November and December, and then we expect the full launch in January.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

And then, Patrick, on the guidance side, you’re correct: the midpoint of our full-year guidance implies a 20% revenue growth in the fourth quarter. Now, the acceleration that we expect to see in the fourth quarter is actually a buildup of all the activities we engaged in throughout the year. It started with the meaningful physician base growth that we’ve seen. Just comparing third quarter to third quarter, we’ve added nearly 250 additional physicians.

The expansion to interventional, as Laura said in her prepared remarks, is actually doing well. The Intra platform is really accelerating adoption within the interventional space, and we saw that happen in the third quarter, which tends to be a slow quarter generally. So that bodes well for the fourth quarter. The last piece would be on the trauma side. We’ve been working very closely with Smith & Nephew to sort of build the foundations, entering a busy trauma quarter as well. And coming into the fourth quarter, we’re seeing the benefit of that as well. And then the last piece on Onyx — what’s incorporated in the guidance: when we started the year we had said Onyx would be available at some point late in the fourth quarter. We’re obviously ahead of track on that, given that Onyx was in alpha launch in October, and the color Laura provided — it’s actually doing quite well for us.

So I think net-net, we’re positioned really well. Now, the two things that could provide potentially additional upside would be the impact of new DRGs on Granite — especially as we think about the third quarter; we had more Granite cases with two implants. As we continue to drive awareness in the DRGs, can we move that to four? And then as we continue to broaden our alpha launch with more surgical sets out there for Onyx, could that be additional upside for us as well?

So I think we feel very good about the setup ending the year, and then also what it sets us up for as we look at the next few years from a growth perspective.

Patrick Wood (Analyst)

Sarah, thanks so much, guys.

OPERATOR

Thank you. One moment for the next question. The next question will be coming from the line of Matthew O’Brien from Piper Sandler. Please go ahead.

Matthew O’Brien (Analyst)

Good afternoon. Thanks for taking the question. Maybe just to keep going on Onyx for a second here. Laura, you mentioned the 1,800 active docs, roughly, that you have now. How quickly can you access those clinicians? That would seem like that’s the low-hanging fruit versus going after people that had not been working with you in the past. So is there any kind of metric we should think about in terms of how many you can get to by the middle of next year, by the end of next year — anything along those lines?

And then just talk a little bit about training — how quickly they can get up the curve in terms of getting accustomed to Onyx and being able to incorporate it in their practice. And then I do have a follow-up.

Laura Francis (Chief Executive Officer)

Yeah, thanks, Matt. Good questions. And in terms of Onyx, you’re right. So this first quarter is really focused primarily on just the alpha launch that we’re working on right now. But as we continue with every single week, we’re pushing out more trays into the field as well as more inventory as well. And given just the sheer number of surgeons that are already using our Granite product, it gives us the opportunity to work with them, first of all in these Granite cases themselves, right?

So we actually have an opportunity to have a significant throughput and increase the revenue per case with adding Onyx just into existing Granite cases. But then also you have these 1,800 active physicians as well at the same time. And a lot of those physicians, they are doing cases that don’t necessarily go to the pelvis and so they haven’t been using Granite in those cases, but they are going to be more likely to use Onyx either at the top of the construct or at the bottom of the construct. So like for example, in cases where surgeons use both Granite and Onyx, we’re seeing utilization of around six implants per procedure, which is going to translate to that increase in the revenue per case that I just mentioned.

But in addition to all of that, there’s also the opportunity to go after new surgeons too that had not, for one reason or another, adopted the Granite technology. And we’re already starting to see cases with some of these key opinion leader surgeons in the early stages that are interested in our Onyx product. So I think your question on the commercial infrastructure being in place, and it’s really just expanding the surgical capacity, is what’s really going to be important. You also talked about training a little bit, and the training is very straightforward, very similar to what we did with Granite. We do a similar sort of a tray review with the surgeon before a case. They’re already used to using other technologies in these cases. And so it’s just a reminder of here’s our solution, here are our instruments.

And so the adoption and the road to training these surgeons is a very quick one.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

The only other thing I would add, Matt, is Onyx is a line extension. So from a VAC committee approval perspective, it’s actually a very seamless process for us. It’s just targeting a different disease state, like Laura said, at the UIV and LIV.

Matthew O’Brien (Analyst)

Okay, appreciate that. And then something in the press release really got my attention. It’s talking about setting you guys up for the strongest foundation for growth acceleration in the history of the company. I mean, you’ve done 20, 30% growth in the past. I’m not expecting the high end of that 30% number next year, but the street settled in at about 15.5% growth for next year. On the top line, that would seem to be well below what you can likely do given all the tailwinds.

Is that a fair assessment or is there something else that we should be contemplating? Thanks so much.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Yeah, so Matt, I can take that question. You know, when we make that comment—and we don’t make it lightly—if you look at the structural multi-year tailwinds that we have in our business, I’ll just summarize the top six that we have. The expanded call point strategy with interventional spine is translating into faster penetration in the SI joint dysfunction market. And the proposed expanded coverage for site of care that may be announced any day at this point, assuming it’s finalized, could be a further tailwind in that business for us.

The Smith & Nephew collaboration is starting to gain some momentum as well. We’ve talked about the new DRGs, the impact it can have on Granite adoption, and more implants per case. Onyx—again, we’re in alpha launch right now. We’re going to put more capacity out in 2027 throughout the year into 2028. And then you’ve got the potential benefit of NTAP at the end of 2027 as well. And then we’ve got other projects we’re working on. So truly a lot of tailwinds in the business.

Now, as excited as we are about those tailwinds, we are still in the early stages of evaluating their impact and we feel good about the growth prospects into 2027, but we want to get a few more months behind us from a performance standpoint before we talk about 2027. Our focus is on closing the year strong, going through our planning process, which we are under right now, and then talking about guidance and expectations in late February when we announce our fourth quarter earnings.

And look, we’re going to consistently be thoughtful and prudent in our approach, but we do believe that these tailwinds are not just limited to 2027, but even beyond.

Matthew O’Brien (Analyst)

Great. Thanks so much.

OPERATOR

Thank you. One moment for the next question. Our next question is coming from the line of Richard Neuwiter of Truist Securities. Please go ahead.

Richard Neuwiter (Analyst)

Hi. Thanks for taking the questions. Maybe just to follow on Matt’s question just now on the bottom line, I was just wondering if you could offer any thoughts as you potentially are about to move into one of the biggest acceleration or most confident points of jump-off points for acceleration going forward. And on profitability, what that could look like. It looks like you’re on track to potentially exit at around 9% in 2026 adjusted EBITDA margin.

That’s about what you did exiting last year for Q25. Just curious how we should think about the ramp, especially with what seem like pretty significant drivers both from a margin standpoint and just sheer growth dollars. Follow up.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Yeah, no, Richard, happy to take that question. Our profitability is an outcome of our strong top-line growth. Let’s just start with that, and obviously with the way our spend. As a result, we’ve reflected a reduction in OPEX growth for the year. Now, you know, when we think about the coming years from a profitability standpoint, we do have a lot of growth-oriented investments that we want to be able to make in the business. We do remain committed to our operating leverage expectations.

As we’ve always said, on the low end it’s 1.25 times revenue growth to OPEX growth and could be as high as 1.75 times over the long term. Now these investments we think are really important to continue to drive this sustained long-term growth that we’d like to see the business deliver. It’s around investment in R&D personnel and our own machining capabilities to support the annual cadence of new product launches. We do expect to expand our sales force to capture the demand that we’re seeing across all the call points. And then as we launch new products, including Onyx, we want to make sure we are investing in training and marketing activities.

So these are deliberate investments that we want to be able to make in the business to drive growth. But we do expect that the accelerating top-line growth should allow us to drop a significant amount of dollars to the bottom line, even at the midpoint of the leverage being around 1.4, 1.5 times.

Richard Neuwiter (Analyst)

Thanks. And maybe just one follow-up. Look, congratulations—really nice acceleration in your procedure growth this quarter, but the ASP took a little step back. Anything to call out there on the quarter, Laura, and kind of how should we think of that trend into 4Q, especially if you’ve got increased revenue-per-procedure tailwinds?

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

That’s a great question, Richard. So again, 20% procedure volume growth in the third quarter—it’s actually very encouraging. We’re very pleased with that, especially when you think about all the noise around slowdown in procedure volumes. And from an ASP standpoint, when we started the year we had talked about sort of low- to mid-single-digit ASP degradation from a per-procedure standpoint, especially as mix evolves. Now when you think about the reach of our platform today, it now ranges from single-implant procedures where INTRA is used in an ASC or an in-office setting on one end, and on the other end you’ve got cases with Granite and also Onyx which could be four-plus-implant cases which are performed in inpatient settings. So both of these factors can have an impact on our ASP.

And when we looked at the third quarter, what we saw was Granite continued to grow well, but we did see an increase in two-implant Granite cases which generally tend to be more on the degen side versus the four-implant side. Now with the new DRG changes, we’re continuing to educate people on the benefits of two points of fixation on either side. And then the strong demand on INTRA from interventional spine physicians in the ASC and office-based setting, which typically carries a lower ASP, was expected.

But what was encouraging was it’s actually allowing us to penetrate the huge multibillion-dollar untapped SIJD TAM we’ve been targeting for so long. So as we think about our ASP, two most important variables will be around where the volume growth is coming from and the site of service. Now Laura talked a little bit about it earlier in the comments. Even in the early stages of Onyx, what we are seeing is the average procedure ASP is actually moving up coming into the fourth quarter because we’re starting to see some of the benefits of Onyx and also the uptake in multi-implant Granite cases go higher.

Now offsetting that is going to be the interventional volume. But we think net-net you should see an improvement in ASP in the fourth quarter given the dynamics, the way they’re playing out.

Richard Neuwiter (Analyst)

Thank you.

OPERATOR

Thank you. One moment for the next question. Our question will be coming from Kaitlyn Roberts of Canaccord Genuity. Please go ahead.

Kaitlyn Roberts (Analyst)

Hi. Thanks so much for taking the questions. Maybe just jumping off of what you mentioned about the procedure volume growth, which was strong given the noise that you’ve heard from others, maybe just a little bit more color on what you are seeing as it relates to procedure volume across your call points.

Laura Francis (Chief Executive Officer)

Yeah, thanks, Caitlin, for the question. I mean, if you look at the third quarter with the volume growth at 20%, we would say the short answer is no, that we’re not seeing this concern that you’re hearing from some other companies. Now, it may be that we’re just in a unique position in the industry. We’re targeting unmet clinical needs and known failures in various fusion procedures, and it’s clearly resonating with our customers. I think also the fact that we’re building new TAMs, and now we’re at a point where we’re targeting over 600,000 annual procedures.

We’re not fighting for market share gains, we’re more identifying these new opportunities, and that’s contributing to the growth that we’re seeing. So I can’t necessarily speculate on the macro impact and the broader industry volumes, but just given our particular situation with multiple growth drivers, we think we’re really well positioned to navigate if there are headwinds or issues that are out there and to drive strong growth. And even coming into the fourth quarter, if you look at our guidance, it’s saying that our best estimate is that we will exceed 20% growth. And so what we’re seeing and expecting is continued strong demand across the portfolio.

And especially given the tailwinds with Onyx and then the new Granite DRGs and finally the interventional ramp as well, it bodes well for us.

Kaitlyn Roberts (Analyst)

Great. And then just on the Smith & Nephew partnership, any KPIs in terms of surgeon or facility penetration you could share, and just thoughts on maybe partnering with them or another company for any future products that don’t necessarily fit your core call points.

Laura Francis (Chief Executive Officer)

Yeah, thanks for asking about that. And actually we’re making nice progress with Smith & Nephew at this point. It does usually take some time in order to build that relationship and to see the results. Especially in the case of SI-BONE. We’re a pretty nimble company that is able to innovate and bring products to market and see the impact fairly quickly. But working with a larger company, it does tend to take a little bit more time. But over the last several months we’ve been focused on surgeon education, training, and also just expanding access to TNT at these various trauma centers. And there is this normal onboarding period with physician engagement, hospital approvals, and the initial procedures. But we’re pleased with what we’re seeing exiting Q3 and entering Q4, which is typically more of a seasonally stronger period for trauma. And we are starting to see the results of our joint commercial efforts.

OPERATOR

Thank you. One moment for the next question. Next question is coming from the line of Yung Lee. Jeff Koh, please go ahead.

Jeff Koh (Analyst)

All right, great. Thanks for taking the question. I guess maybe back to Onyx. Wanted to hear, I guess, a little bit more on the attachment rate for Onyx with the classic Granite cases. I guess what are you seeing in the alpha launch group so far? How frequently are they being used together versus not? And then where do you think that can go longer term?

Laura Francis (Chief Executive Officer)

Yeah, I mean I talked a little bit about some of the measures that we’re currently using and as you’re stating, the most obvious application is for our surgeons to use Onyx in the same cases as Granite. And we’re seeing that come through and it’s low-hanging fruit, if you will, if you look at that opportunity. But what’s also happening is, let’s talk about the surgeons that are using Granite regularly when they go to the pelvis. What we’re seeing is that those surgeons are actually using Onyx in the cases where they’re not going to the pelvis. So they may not be using Granite in those cases, but they are surgeons that have been using our products for an extended period of time and now really like what we’re offering here with Onyx and for their patients with compromised bone.

And as I mentioned, the issue is really having issues with screw loosening in these patients that have compromised bone. And so the application is well understood. And there’s an excitement with our surgeons that we’re finally solving this problem overall. And then finally, we’re actually seeing surgeons who have not used Granite previously, but they actually are interested in using Onyx. But as you said, I would say the primary use case is in those surgeons that we’ve been working with for an extended period of time in many cases in those procedures where they’re using Granite. But we’re seeing much more than that as well. And I did talk a little bit about implant utilization as well in these cases where, you know, what we’re seeing in a case where they’re typically using Granite and Onyx together is they’re using six implants in those cases.

So it’s a pretty exciting opportunity. And it just gives us this significant benefit in terms of increasing surgeon density that we didn’t necessarily have with our portfolio previously.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

And then, Yung, the thing I would say is if you even look at the underlying TAM, you know, Granite’s underlying TAM is about 130,000 cases, 140,000 cases, of which about 30,000 to 40,000 cases were in the adult deformity space. And given the complexity of those adult deformity procedures, our expectation is almost all those cases where you use Granite, you might want to use Onyx at the top and the bottom of the construct. That’s what’s embedded in our TAM numbers.

But then once you get beyond that, within the degen space, when you think about the number of fusion procedures that happen there, there’s around 400,000 procedures. Our best estimate is 100,000 of those end at the sacrum, and that’s where Granite would have been used. But UIV/LIV can extend beyond those 100,000 cases as well, especially when you think about the number of those patients that have osteoporosis. Rough estimate, one in three patients.

And if you look at patients who are over 50, even more patients have osteoporosis. And Onyx would have application there at the UIV and LIV as well. And those end up around 150,000 cases. Now, those are bread and butter cases, too, for a lot of physicians that may not do Granite because they may not be at academic centers, but do do SI joint dysfunction. And so we’ve got a nice overlap of physicians that can use Onyx, whether they use Granite or not.

Jeff Koh (Analyst)

All right, great. That’s very helpful, I guess. Wanted to follow up a little bit on that concept, I guess. What are your expectations for any potential halo effects from Onyx, where you can enable some conversion or pull-through of surgeons to the other products in your portfolio?

Laura Francis (Chief Executive Officer)

I think there’s no question that there’s a halo effect. And I talked a little bit about the clinical data that we have on our Granite technology. And we recently had a surgeon that came into a board meeting that just talked about the fact that we have really addressed the issue at the bottom of the long construct with Granite, and now we’re proving it out with our Sylvia study information and then also our Paula study information too. And so it’s well known that you have this issue with the upper part of the spine and the lower part of the spine.

So in these particular cases with Onyx, it is another major failure point at the top and the bottom of the spine. And public literature is actually reporting screw loosening in as many as 27% of spinal fusion constructs. And so there’s this understanding of what the problem actually is. There’s also an understanding that SI-BONE was able to address the issue at the bottom of the long construct. And now we’re moving to the next area that is a significant challenge for these particular surgeons and their patients. So I’m going to go back to what you said in terms of a halo effect. I do believe that all the work that we’ve done on Granite does have a halo effect and that it will have an impact on Onyx sales.

Jeff Koh (Analyst)

All right, thank you.

OPERATOR

Thank you. One moment, please, for the next question. Our question is coming from the line of Gracia Mahoney of Bank of America. Please go ahead.

Gracia Mahoney (Analyst)

Hey, thanks for taking the questions. The first one I wanted to ask on was just in the prepared remarks you talked about how the new DRGs may benefit Onyx. So just wanted to clarify if they already map to it today, if not, what needs to happen for that to occur and maybe just in terms of an NTAP strategy, if you do that, what sort of the application filing timeline process would be like and what you’re doing to prepare hospitals for reimbursement around the project.

Laura Francis (Chief Executive Officer)

Yeah, yeah, good questions, Gracia. And we are excited about the new Granite DRGs. We’ve been working for an extended period of time with CMS on this particular topic, and we’re really pleased that they created these new DRGs, recognizing the clinical complexity and the additional costs associated with treating these patients. And so from a Granite perspective, these new DRGs went into place on October 1st of 2026. And so it’s going to have an impact on the Granite business.

And if you think about where we were previously, the NTAP expired October 1st of 2025. So for the last 12 months there has not been a Granite NTAP in place. But now with these new DRGs, and these new DRGs, if you look at the reimbursement, they pay up to an additional $50,000 more for qualifying cases. It does provide the opportunity for hospitals and surgeons to feel confident in using Granite. And if you think about the NTAP, the NTAP is specific to Medicare cases, whereas the new DRGs are going to cover all payers, not just Medicare, but also commercial payers too.

So we think that all of that is really important just for our Granite business. Now you asked about the impact on Onyx as well. And as I said, a lot of the cases that we’re seeing currently with Onyx are being done in conjunction with Granite. And so those cases are going to be accessing the new higher paying DRGs. And so in terms of cost, the new DRGs are helping to address the higher cost associated with these technologies. You also asked about the NTAP for Onyx. We have already applied for an NTAP with CMS.

And given that this is a breakthrough device, we should be able to follow an alternative pathway with our Onyx technology, and we’ll know for sure October 1st of 2027, and earlier than that, I think April already we’ll get some information on the NTAP for Onyx specifically. But we do think that there’s another opportunity there for Onyx in the future with the NTAP, but also currently in conjunction with Granite cases.

Gracia Mahoney (Analyst)

Okay, that’s super helpful, thank you. And then I guess just how to think about maybe all these product launches and any incremental impact to gross margin? I think Street’s modeling gross margin down a little bit versus this year. So any sort of puts and takes to consider there as we go into 2027?

Laura Francis (Chief Executive Officer)

Yeah, I think it’s a good question and I’ll have Anshul talk a little bit about the gross margin impact. But the question about additional product launches is important. We really are looking at a compromised bone opportunity here. And what it’s done is it’s created this opportunity to significantly expand our product roadmap and for us to be regularly putting out product in order to meet these new opportunities and address them, very similar to what we’ve done already with Granite, for example, with pelvic fixation, very similar to what we’ve done with TNT with pelvic trauma, and now finally with Onyx with the top and the bottom of the spine construct. We have more opportunities to further expand and regularly launch products.

And I’ll let Anshul talk about the gross margin impact.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Yeah, so thanks for that question. We really feel great about our industry-leading gross margins. Year to date we’ve actually tracked ahead of what we guided and part of that is just our focus on asset utilization and implant and tray cost reduction initiatives. As our business scales with that strong top line growth, we are focused on driving more incremental revenue dollars to the bottom line and progressing towards improving GAAP profit dollars.

Now when you think about 2027—and I’ll provide a couple years expectations there—going into 2027, we do anticipate some modest gross margin pressure. Most of that is from the higher non-cash depreciation expenses associated with the additional Onyx surgical capacity we plan to deploy to support the procedure demand that we expect from Onyx. As Laura said earlier, beyond Onyx, we do expect to bring additional platforms to market in the next few years which we know will meaningfully accelerate top line growth given how differentiated they are and that they’re going after known unmet needs.

As we launch these technologies, we’ve talked about it historically that we expect gross margin to be in sort of that 78% area as you go beyond 2027. Most of that’s going to be driven by the subscale nature of the new products and higher non-cash costs from tray depreciation. Now what that does not include is our expectations to work on cost reduction initiatives with our manufacturing partners on our existing portfolio, as well as our internal operational efficiency efforts which include driving high utilization through setting up loaner operations and things like that. So again, very focused on gross margin profitability. We think even at that 78%–79% it will be industry leading and that should translate well into operating profit at the adjusted level and also GAAP profitability in the not too distant future.

OPERATOR

Thank you. One moment please for the next question. Our next question is coming from the line of Matt Blackman of TD Cowan. Please go ahead.

Matt Blackman (Analyst)

Good afternoon everybody. Can you hear me okay? Yes, great. Thank you for taking my question. I’m just going to leave it to one, and Laura, shockingly, the question will be on ONX. I’m curious. Some of the early feedback we’ve been hearing from clinicians is focused on them wanting to see some commercial, clinical, and economic outcomes data before putting ONX into their armamentarium. That doesn’t strike me as an unusual request with a new product. But just curious what you’re hearing from physicians, and to the extent you do need to build, we’ll call it a commercial data dossier, what’s the pathway to do that?

How big do you think that needs to be? How long out do you think that data need to be? Just any color on that would be helpful. Thank you.

Laura Francis (Chief Executive Officer)

Yeah. As you know, we’re very used to putting together high-quality clinical data. We have almost 200 peer-reviewed published papers, including four randomized controlled trials and many more prospective studies as well. The approach that we’re taking here is very similar to what we did with our Granite technology. So we have bench data, and then we have all of the information on the high rate of failure at the upper and lower ends of the long spinal constructs.

And so in a lot of these cases, these surgeons actually don’t have a good alternative solution. And so what we’re seeing is, given how well we handled the situation with Granite and addressed the issue at the bottom of the long construct, and the quality of the bench data and the product itself and the osseointegrative nature of the product, it already is lending itself to surgeons that are interested in using the product now. And so what we’re doing is we’re working with those particular surgeons.

With that said, we’re also looking at the opportunity to build that additional clinical data. And so, in terms of how we’re thinking about ONX, what we’re doing is we’re leveraging the benchtop and animal studies that we have currently. Compared to conventional screws, it compares very well to those. But then we’re also going to launch a prospective, multi-center clinical study to evaluate ONX safety and clinical performance as well. So very similar to what we’ve done in the past.

Finally, one of the other ways that surgeons do address these issues in patients is they use bone cement along with pedicle screws. But in these particular cases, cement can improve initial fixation, but it comes with trade-offs. So the cement can leak outside the vertebra, you can have the potential for nerve injury, pulmonary embolisms, it creates a rigid interface, it doesn’t integrate with bone, and then it can even raise the risk of fractures at the adjacent level.

So the alternatives that surgeons have right now, they’re not good alternatives. So getting back to your question, I do think that there are going to be the early-adopter surgeons that understand that there are no good solutions for these patients right now. And then there are going to be others that are going to wait. In terms of the amount of time that they’ll look, typically six to twelve months, they’re going to want to see some information that shows how these particular patients did. But typically we’ll run our clinical data out at least two years, if not five years.

I hope that’s helpful. Thank you.

Matt Blackman (Analyst)

No, very helpful. Thank you.

OPERATOR

Thank you. One moment for the next question. Our next question is coming from the line of David Saxon of Needham & Company. Please go ahead.

David Saxon (Analyst at Needham & Company)

Great. Good afternoon. Thanks for taking my question, Laura, Anshul. I’ll keep it to one as well. Just wanted to follow up on the revenue-per-case commentary. So, I mean, it sounds like you’ll start to see a benefit from ONX here in the fourth quarter, and just given how early it is in the launch and, you know, I guess that’s going to offset what you’re seeing with Intro. Like, is it fair to expect some pricing tailwind or, you know, revenue-per-case tailwind as we go into 2027?

Just any color there would be helpful. Thanks so much.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Yeah, I mean, you know, I’ll talk about 2027, David, once we close out the fourth quarter on a strong note, get through our planning, and come on the other side. Historically, we’ve always assumed coming into the new year some ASP degradation, again because of the portfolio mix evolving. What you’ve got in our story right now is you’ve got an exciting opportunity within Interventional with SI joint dysfunction where we are becoming the market leader in that space with the most comprehensive solution set.

Reimbursement changes—there could be another tailwind assuming 27279 gets approved for office-based or in-office procedures. So you’ve got that on one side, which will be a big volume driver. On the flip side, you’ve got Granite and ONX with the new DRGs, but also the symbiotic nature of these products being used together in the same procedure. You should get a tailwind from that. So I think, net-net, we’ll talk more on the ASP assumptions when you get into 2027. But all indications are you’ve got the volume benefit on both sides with Granite, ONX, and Interventional, but you will have additional ASP upside from ONX and Granite.

David Saxon (Analyst at Needham & Company)

Great. Thanks so much.

OPERATOR

Thank you. One moment for the next question. Our next question is coming from the line of Daniel Stoddart of Citizens. Please go ahead.

Daniel Stoddart (Analyst)

Yeah, great. Thanks for taking the questions. I’ll try to keep it to one as well. Just thinking about operating expenses, I appreciate you giving those op leverage bands as we think about 2027 and beyond. But I think you mentioned that you expect to expand the sales force as well to try to keep up with some of this demand. So first, how much of an investment could that be? Is it fair to assume that they’ll be mostly focused on ONX and Bedrock? And then how should we think about any cadence in terms of spend in ’27 with the potential rep adds and any incremental spend as you get the ONX launch going?

Thank you.

Anshul Maheshwari (Chief Operating Officer & Chief Financial Officer)

Yeah, no, happy to take that question, Dan. So when we think about our operating leverage in the business, like I’ve always shared, it’s driven by top-line growth and our profitability performance reflects that inherent operating leverage that we’ve built. Now, with a lot of the untapped opportunities that we see ahead of ourselves, both with the existing portfolio as well as new product launches, we do think the investments we want to make, whether it’s on the R&D clinical side like Laura talked about on the ONX clinical side, we believe is really important to continue to drive penetration and adoption there.

In terms of the expansion of the sales force, we’re going to be very thoughtful. The reason to expand the sales force is going to be because we see specific markets where there are huge opportunities, whether it’s within Interventional, or whether it’s with Granite and ONX to be able to drive growth there, or in the SI joint fusion business as well. So we’re not going to sacrifice productivity at the sales-per-territory as we expand. We’re going to be very thoughtful about it, and that’s what gives us confidence in the continued operating leverage in the business—on the low end, the 1.25x; on the high end, the 1.75x—which should translate into expanded profitable dollars falling to the bottom line.

Daniel Stoddart (Analyst)

It’s really helpful. Thank you very much.

OPERATOR

Thank you. And that concludes today’s Q&A session. I would like to turn the call back to Laura for closing remarks. Please go ahead.

Laura Francis (Chief Executive Officer)

I just wanted to say thank you to everyone for participating in today’s call, and we also really appreciate your interest in SI-BONE, and finally, we look forward to seeing you all at upcoming conferences as well as non-deal roadshows. Thanks again. Goodbye.

OPERATOR

This concludes today’s programming. Thank you so much for joining. You may now disconnect.

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