Treace Medical Concepts Inc (NASDAQ:TMCI), a medical technology company focused on bunion correction procedures, reported financial results for the third quarter of 2025 that presented a mixed picture for investors, leading to a sharp negative reaction in after-hours trading.
Third Quarter Financial Performance
The company reported revenue of $50.2 million for the quarter, representing an 11% increase compared to the $45.1 million reported in the same period last year. However, this figure came in slightly below analyst estimates of $50.7 million.
On the profitability front, the company reported a net loss of $16.3 million, or $0.26 per share. While still a loss, this represented a narrower deficit than the $0.29 per share loss anticipated by analysts.
Key financial metrics from the quarter include:
- Revenue: $50.2 million (actual) vs. $50.7 million (estimate)
- EPS: -$0.26 (actual) vs. -$0.29 (estimate)
- Gross Margin: 79.1%, down from 80.1% in Q3 2024
- Adjusted EBITDA Loss: $2.6 million, a 49% improvement year-over-year
Market Reaction and Revised Outlook
Despite the narrower-than-expected per-share loss, the market reacted negatively, with shares falling over 27% in after-market trading. This appears to be driven primarily by the company's significantly reduced outlook for the full year.
Treace revised its 2025 revenue guidance downward to a range of $211 million to $213 million, representing minimal growth of 1% to 2% over 2024. This is a substantial reduction from its previous guidance of $224 million to $230 million and falls well below the analyst sales estimate of $231.6 million for the full year.
Furthermore, the company now expects an Adjusted EBITDA loss of $6.5 million to $7.5 million for 2025, compared to a previous expectation of reaching breakeven.
Operational Highlights and Challenges
The earnings release highlighted several operational developments, though these were overshadowed by the guidance cut. The company expanded its bunion technology portfolio with the full market release of three new surgical systems. It also bolstered its intellectual property, now holding 122 granted patents with 194 more pending.
CEO John T. Treace cited several headwinds impacting performance, including a shift in surgeon and patient preferences towards minimally invasive solutions, which has reduced volumes for its flagship Lapiplasty System. He also noted that broader macroeconomic conditions and softer consumer sentiment are resulting in a greater number of deferrals for elective bunion procedures. These challenges are expected to persist into the fourth quarter.
Liquidity and Path Forward
Treace reported total liquidity of $80.6 million as of September 30, 2025. The company emphasized its focus on increasing topline growth, improving profitability, and leveraging its new products and commercial organization to drive future market share gains.
For a detailed look at historical earnings and future analyst estimates for Treace Medical Concepts, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
