Establishment Labs Holdings Inc. (NASDAQ:ESTA) Q4 2025 Earnings Call Transcript

Establishment Labs Holdings Inc. (NASDAQ:ESTA) Q4 2025 Earnings Call Transcript February 24, 2026

Establishment Labs Holdings Inc. beats earnings expectations. Reported EPS is $-0.08828, expectations were $-0.215.

Operator: Good afternoon. Welcome to the Establishment Labs Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, today’s call is being recorded. I will now turn the call over to Raj Denhoy, Chief Financial Officer. Please go ahead, sir.

Rajbir Denhoy: Thank you, operator, and thank you, everyone, for joining us. With me today is Peter Caldini, our Chief Executive Officer. Following our prepared remarks, we’ll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements within the meaning of federal securities laws. These include statements on Establishment Labs financial outlook and the company’s plans and timing for product development and sales. These forward-looking statements are based on management’s current expectations and involve risks and uncertainties. For a discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements.

I encourage to review our most recent annual and quarterly reports on Form 10-K and Form 10-Q as well as other SEC filings, which are available on our website at establishmentlabs.com. I’d also like to remind you that our comments may include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which can be stated on a constant currency basis or EBITDA, which we disclosed on an adjusted EBITDA basis. Reconciliations to comparable GAAP financial measures for non-GAAP measures, if available, may be found in today’s press release, which is available on our website. The content of this conference call contains time-sensitive information accurate only as of the date of this live broadcast, February 24, 2026.

Except as required by law, Established Labs undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. With that, it’s my pleasure to turn the call over to Peter.

Filippo Caldini: Good morning, and thank you all for joining us today. Q4 2025 was another standout quarter for Establishment Labs. Fourth quarter revenue was $64.6 million an increase of 45.2% versus Q4 2024 including Motiva revenue in the U.S. of $17.3 million. This brings our 2025 total revenue of $211.1 million an increase of 27.2% over 2024. U.S. Motiva revenue in 2025 was $45.6 million a number that I’m sure significantly exceeded everyone’s expectations. As our business scaled, the operational leverage that we’ve been talking about is coming into focus. Q4 had us exceeding 70% gross margin for the second consecutive quarter, and our margins will continue to improve. Our fourth quarter net loss from operations was $3.9 million down 79% from Q4 2024.

Our Q4 adjusted EBITDA was positive $5.5 million, up from the negative $13.1 million we reported in Q4 2024. This trend should continue throughout 2026, culminating in our first positive cash flow quarter this year. In 2027, we expect to be cash flow positive for the entire year and our margin should improve for years after that. With this trajectory and our ending cash balance is $75.6 million in 2025, we have no need for additional capital. As noted at the JPMorgan Healthcare Conference, we are profitable not only setting guidance for 2026, but also providing some visibility into 2027. As such, we are giving guidance for 2026 and of $264 million to $266 million, and there may be some upside to these numbers. At a minimum, this is a 25% growth and we believe that 2027, we will see at least this level of growth as well.

Q4 capped off a remarkable 2025 for Establishment Labs, we didn’t just see the U.S. market for growth in the years to come. We established ourselves as the company transforming the industry, materially changing and increasing the conversation about breast aesthetics. The $45.6 million in U.S. revenue and approximate 20% augmentation market share exiting 2025 is something that took the last new entrant almost 10 years to achieve. And we did in 1. How do we accomplish this? Well, first off, there’s been a complete lack of innovation in breast aesthetics for decades. We have had an active R&D pipeline since 2010 and which continues today and is unparalleled in the industry. Our R&D investment continues to translate into highly differentiated products that address significant unmet needs in the market.

When patients review or hear about the FDA study complication rates for today’s commercially available implants, they recognize that Motiva should be part of the decision when selecting both a surgeon and an implant. Plastic surgeons tell us that when patients are presented with different implant options during consultation, 9 out of 10 choose Motiva even at a higher price point. This isn’t just about data for them. Patients are gravitating towards Motiva when they compare implants in their hands. When doctors dig into the science and data behind Motiva, they find rigorous scientific literature that details our technologies and why implants are designed to create better patient outcomes. The process of consideration has been amplified and is actively discussed across social media.

There is a new era of transparency that has evolved as women share their journey and talk openly about their aesthetic goals and decisions. An estimated 300,000 women get a primary breast augmentation every year in the United States, and it continues to be the #1 aesthetic surgical procedure annually, but it has always been a secret shared quietly. Social media has created a new paradigm where aesthetic and beauty secrets have become normalized. We believe that the combination of our innovative products and this new era of transparency is creating meaningful market expansion, and we can already see the start of this trend. It is not just patients that are excited about Motiva. For the first time in a very long time, plastic surgeons have a product and a surgery to talk about.

It’s new, it’s differentiated, and they are taking the social media to talk about it. Their excitement and passion for Motiva and what it means for breast augmentation comes through and patients are responding. We are very thoughtful in how we spend our marketing dollars. And obviously, compared to some of our competitors, our resources are limited. But the marketing value we are receiving from patients and doctors is a competitive advantage and is very difficult to compete with. Our innovation and its reception in the market is driving adoption and plastic surgeons report to us that many patients come in asking for Motiva by name whereas prior to Motiva, they would really ask for a brand. All this has led to one of the fastest product launches in breast aesthetics history.

The momentum has continued in Q1 of 2026 and with both January and the first 2 weeks of February, exceeding our expectations. Since launch in late 2024, we have onboarded over 1,500 accounts, we continue to sign up new practices every day. January and February are peak conference months for plastic surgeons and Motiva continues to dominate the podium discussions with surgeons actively seeking us out at these events to learn more and engage with us. It certainly appears our growth curve will continue. In a recent blinded survey of plastic surgeons, 88% said they either use or are interested in trying Motiva with the top reasons including patient-driven demand, an unmatched safety profile, the benefits of SmoothSilk surface and the opportunity for above the muscle placement.

In this survey, 75% of surgeons noted, they’ve been asked for an implant brand by name and surgeons reported that 93% of the time, that brand was Motiva. Patients actively seeking out Motiva is having a significant impact on account volumes. In that same survey, surgeons with greater than 50% Motiva share in their practices saw year-over-year growth in augmentation volumes that was more than double that of surgeons primarily using another brand. This is important because while many early adopters have moved the majority of their volume to Motiva and are seeing the benefits of this on their practice volumes the opportunity to grow our share of procedures and accounts remain significant. This is not surprising given how clinic onboarding has ramped up over the year and because many surgeons plan and schedule surgeries months in advance.

As we move through 2026, we expect to see our share in these accounts to move meaningfully higher. These efforts are being supported by a best-in-class commercial organization. In 2026, we plan to expand our U.S. sales force with the addition of up to 15 more sales representatives, a majority of whom have already been hired. This team of seasoned industry veterans are in plastic surgery accounts every day pushing our share higher. 2025 was also the year we started to introduce the concept of minimally invasive breast augmentation through our early experience of Preserve. We had strong global demand, and we’re confident that patients and doctors in the U.S. would be equally receptive. If Motiva implants alone were exciting in the U.S. market what would that technology plus the promise of smaller incisions, minimal anesthesia and fast recovery bring.

The acceptance and demand outstripped even our own expectations. For decades, plastic surgeons contended, these ideas were not important to patients. You just have to look at the social media response and know that patients feel very differently. We have 2 types of women choosing Preserve. The first are women that are already committed to the idea of breast augmentation, but are now choosing Preserve at a much higher price point because of the benefits over traditional augmentation. The second are women that were simply not interested in legacy breast augmentation procedure, but are now considering and booking surgery. For that second group, it may have been the aversion to general anesthesia, the fear of extended downtime that disrupts daily life or a number of other factors.

Regardless, they are now part of a whole new group of consumers considering the possibility for the first time. Of the organic leads that have come through the Preserve’s section of our website pre-launch 81% of patients looking to get connected with the surgeon said they are only interested in getting a breast augmentation if they can get Preserve. This marks a meaningful paradigm shift in the industry with Motiva uniquely positioned as the only solution meeting evolving consumer interest. We charge about 2x more for Preserve than we do for traditional breast augmentation. Preserve is not only expanding the market on a dollar basis. It’s expanding procedure volumes as well. Based on our U.S. early experience, we are seeing expansion in the category.

Approximately 15% of Preserve patients in the U.S. reported they were not previously considering a breast augmentation prior to learning about the procedure. In March, we are moving from our early experience to a full launch. We have trained more than 90 surgeons many of whom report patient wait list and women traveling across the country to access the procedure. In a recent survey with consumers on Preserve, over 55% of patients considering breast augmentation indicated a willingness to pay a premium and surgeons are currently charging 30% to 50% more than traditional augmentation. The average breast augmentation of America is about $9,000, and currently, the average pricing for Preserve is more than twice that. This pricing reflects the value of a less invasive tissue preserving option with faster recovery and minimal anesthesia.

We expect to have at least 200 plastic surgeons trained by the end of 2026. If you’re doing diligence around the impact that Preserve is having, I suggest talking to surgeons that have performed a number of cases. At least 5 surgeons have already done more than 40 cases in geographies that span coast-to-coast. Surgeons cite the benefits of Preserve to patients, but also to their practices. One plastic surgeon told me recently that preserve was game-changing. He used to have a local practice occasionally regionally. Now he has patients flying in from all over America. Another plastic surgeon that methodically tracks her metrics reports that she’s able to do 3 or 4 more operations per week with the time that Preserve saves here. Our minimally invasive surgery portfolio is a real win-win for all.

Patients are getting access to benefits that are incredibly important to them. Surgeons are able to charge more per patient and do more surgeries at the same time, better experience for patients and better businesses for surgeons. In December 2025, we also submitted Motiva implants to the FDA for approval in primary and revision breast reconstruction. Reconstruction represents a significant strategic opportunity as it effectively doubles our total addressable market in the United States while offering higher average selling prices. Motiva Flora breast tissue expander is already in 200 facilities nationwide, and this footprint should continue to expand as we move closer to FDA approval. In addition, we remain active in communications with the FDA regarding our small size of submission, which will further expand our portfolio, meet a broader range of patient needs and allow us to take a higher percentage of cases by surgeons already using Motiva.

Beyond these initiatives, Mia, Ergonomix2 and GEM are also part of the innovation pipeline that we’re working to bring to the U.S. market in the coming years. Along with our success in the U.S., our OUS performance remains strong and well diversified. A major focus for us in 2025 was our direct market and we have seen very good results. The number of accounts in many of our direct markets continues to grow, underscoring the strength of demand. European direct markets delivered more than 20% growth for the third consecutive quarter, led by outstanding performances in the U.K., Germany and Spain. In Latin America, results have stabilized in Brazil, while Argentina continues to post strong growth. Additionally, our recent acquisition of Benelux exceeded our expectation in the first year.

While distributor markets can fluctuate based on the timing of orders, we are seeing healthy demand globally. Across APAC, China remains a key focus, and we’re actively working with the local distributor and seeing improved performance. Our minimally invasive platform, Preserve and Mia continues to demonstrate strong momentum outside the United States. Preserve is now available in 33 global markets with demand exceeding expectations and more than 700 accounts opened. Mia outperformed the $8 million to $10 million guidance in 2025 and has more than doubled the number of accounts compared to 2024. Notably, all Mia clinics have adopted Preserve, enabling them to offer the benefits of a less invasive augmentation solution to a wider range of patients at price points far greater than a traditional breast augmentation.

Globally, we expect demand for a minimally invasive platform to exceed $30 million in 2026 and continue to be a key growth driver in years to come. As I’m sure you have noted, we issued a second press release this morning around the management transition we’re making effective March 9, which is really about getting Establishment Labs ready for our next phase of growth. Over the past several years, we have been focused on driving efficient execution and scalability. We are now adding additional leadership to sustain operational momentum while ensuring oversight of initiatives that require deep business expertise and strong leadership. With this, we are delighted to have Raj transition into the role of SVP Global strategy. His deep understanding of our business, strategic perspective and broad industry experience will be instrumental.

There are a number of initiatives underway that should keep us at a very high growth rate for the foreseeable future and exactly how we execute these requires extensive planning and oversight. Along with this, we are pleased to welcome Cassandra Harris as our new Chief Financial Officer. Her strong background in operational excellence and proven track record of strengthening financial discipline while enabling growth will be critical as we execute on our priorities ahead. I will now turn the call over to Raj.

Rajbir Denhoy: Thank you, Peter. Total revenue for the fourth quarter was $64.6 million, an increase of 45.2% from last year. Excluding the positive impact of foreign exchange in the quarter, growth would have been approximately 39.4%. Sales from Motiva in the United States were $17.3 million. On a geographic basis, in the fourth quarter, sales in Europe, Middle East and Africa were 41% of the global total. We saw strong growth in the region overall, including another good quarter in our direct markets where we exceeded 20% as well as good demand from our distribution partners. Sales in United State were 26.8% of the global total. Latin America was 18% of sales. Brazil remained stable, and we saw good growth in Argentina or other direct market in the region as well as from our distributors.

Asia Pacific was 14.1% of sales. Results in the quarter reflected the comp in the year ago period where we saw sales to our Chinese distributor as well as the normal ebbs and flows of distributor purchase timing. Gross profit for the fourth quarter was $45.5 million or 70.5% of revenue. This was a 200 basis point increase compared to the 68.5% of revenue last year. Overall, in 2025, our gross profit margin increased 330 basis points compared to 2024. Primarily the result of the higher margin sales in the United States. SG&A expenses were $44.0 million and were flat compared to the fourth quarter of 2024. R&D expenses for the third quarter were $5.4 million. Total operating expenses for the fourth quarter were in line with the year ago period at $49.5 million.

Adjusted EBITDA was positive $5.5 million in the fourth quarter. This compared to a loss of $13.1 million in the fourth quarter of last year. This is our second consecutive quarter of positive adjusted EBITDA. The $18.6 million improvement year-over-year in adjusted EBITDA was driven by the strong sales and the higher gross profit in the United States. But we’ve also been very focused on managing our operating expenses overall. Over the course of 2025, we grew our U.S. commercial operations, and we launched the second offering in our minimally invasive portfolio. We’re able to do this and still generate increasing profitability by finding efficiencies across all parts of the organization and making structural changes when needed. Cash increased $4.9 million in the fourth quarter to $75.6 million.

The increase was primarily the result of reduced operating cash use as well as inflows from option exercises. For 2026, our initial revenue guidance is for $264 million to $266 million, an increase of 25.1% to 26% over 2025. We expect our OUS business will grow in the single digits, and the U.S. will exceed 30% of overall sales, which is up from approximately 22% in 2025. Gross margins are expected to increase 200 to 300 basis points. Operating expenses in total are expected to be approximately $195 million to $200 million in 2026. However, as we saw in 2025, there can be some variability in quarterly spending levels based on the timing of expenses. We expect to be adjusted EBITDA positive every quarter in 2026. Cash use will continue to improve over the course of 2026.

Our free cash use is expected to be less than half of what it was in 2025, and we expect to reach cash flow positive this year without the need for any further equity raises. Our credit facility will enter the last year of its term in April and we are considering a number of refinancing options. Overall, our financial outlook reflects a significant momentum in our business. The adoption of Motiva in the U.S. is still early with significant room to drive further practice adoption as well as penetration within accounts. Preserve will add to both procedure growth as well as our realized ASPs. Outside the U.S., global demand remains good and our focus on direct markets and our minimally invasive portfolio should lead to another solid year of results.

Now on the P&L, gross margins are benefiting from the positive geographic and product mix playing out. Even with continued investments, incremental operating spending over the next few years will be at a rate well below top line growth. This leverage should allow us to achieve cash flow profitability in the second half of the year and is the basis of the meaningful and increasing earnings we expect to see in 2027 and beyond. We continue our work to make ESTA eligible for inclusion in a number of indices including the Russell. Recent updates have increased our confidence that we will be included this year. Finally, as Peter mentioned, I’m moving into a new role at Establishment Labs. With the company on a good financial footing, Peter and I have been discussing the best way for us to realize the significant potential we have to create shareholder value.

ESTA is in a very unique situation with unmatched innovation and products and a pipeline that even further distances us from our competitors. To realize this, effective execution is the key. The company has grown very organically over the past 20 years and there are number of areas that have the opportunity to be strengthened. After 5 years as CFO, I’m looking forward to a new challenge of leading our global strategy. In this new role, I will remain actively engaged in driving our performance, but the day-to-day finance function and CFO role transition to Sandra Harris, who was selected after an extensive search. With that, I will turn the call back to Peter.

Filippo Caldini: Thank you, Raj. While continuing to invest selectively, we are maintaining an investment pace well below the expected top line growth. We expect to achieve free cash flow positive in 2026 with meaningful earnings beginning in 2027. I’d like to thank the entire organization for a great 2025. This year, we remain focused on disciplined execution and building a global category leader. Operator, we’re ready to take your questions.

Q&A Session

Operator: [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] The first question comes from Josh Jennings with TD Cowen.

Joshua Jennings: Congratulations to a strong end of the year and excited for you, Raj, in your new role. I was hoping to just start on the minimally invasive portfolio. I mean, it seems clear that Preserve and Mia are pulling patients off of the sidelines a couple of years back, I think prior to your tenure Peter, the team had kind of put forward the potential for the minimally invasive portfolio to grow the market and grow breast augmentation procedure volume, maybe even double them. But can you just maybe not going to put that stake back in the ground, but can you just talk about the optimism and the trajectory of the market with minimally invasive offerings from establishment coming through? .

Filippo Caldini: Yes. Thank you, Josh. I mean what we are seeing in the OUS markets with the minimally invasive platform from the early experience in the U.S. is extremely positive. I think with the benefits of no general anesthesia, smaller scars, faster recovery, I think that really resonates with patients. And we’re seeing that in the marketplace and also with some of the surveys when we talk about 14% of patients that decide to do breast augmentation. We’re not considering until they heard about Preserve and that’s in early experience survey in the U.S. So it’s a real driver for the — what we think is not only to drive share for us in the market, but also to bring new patients and new women into the category. So we’re really seeing that benefit.

And we think that that’s going to continue to be a key driver. It’s going to be a bigger part of our business as we go throughout this year as well as next. And our estimate and what we put in terms of the guidance, over $30 million this year, and we feel very confident with that. So this will be a real driver for us this year as well as into the future.

Joshua Jennings: Excellent. Maybe just one follow-up. I appreciate you laying out U.S. revenues being roughly 30%. You are planning on adding reps around 30% higher number. Maybe just talk about where you’re pulling these reps from. Are you still taking all-star veterans from the competition in the breast implant sector or the aesthetic sector? And just remind us of how productivity can ramp for these new reps as they come on board over the course of 2026.

Filippo Caldini: Yes. Thanks, Josh. I mean, I think one of the key drivers for our success in the U.S. market is we’ve been able to put together a best-in-class organization. So if you couple that with what we believe is the best products from a performance and a safety profile and bringing together with the best-in-class organization. And we’re very focused on the type of reps that we bring to Establishment Labs. And we are continuing to focus on reps that have significant industry experience that have a very good reputation in the market that have a very strong track record. And I think what’s very positive for us is that a lot of these reps see us as very attractive opportunities. And that will continue to be a key driver for us in this year as well as into the future.

Operator: The next question comes from Mike Matson with Needham & Company.

Michael Matson: So just want to start with one on reconstruction in the U.S. So can you maybe just talk about how you plan to launch into that market. And when you do get the FDA approval, do you need specialized reps? Do you need maybe like a corporate accounts type sales team? And maybe just talk about the importance of hospital contracts there. .

Filippo Caldini: Yes. Thanks, Mike. I mean as you see and we’ve highlighted that the recon indication is a really large opportunity for us. I mean it really doubles the market potential for us. And we’ve already kind of seeded the market with some of the with Flora we’re in over 200 accounts. As we get closer to the launch, we will be expanding — obviously expanding our sales force. We’ll probably look at a combination of some reps that will be hybrid, and then we’ll have some dedicated reps specifically for the larger hospital network. And I think that we need to make sure that we have the right coverage, right sales support to ensure that we really capitalize on that opportunity. And as I mentioned before, we’ve already gotten some seeding in terms with the Flora.

So I think the ramp-up will be a little bit quicker. And I think — but as it relates to the sales force, we want to make sure we have some specific coverage, but we’re also going to be leveraging the existing sales force.

Michael Matson: Okay. Got it. And then the international growth was a fair bit stronger this quarter. So was there any kind of one-offs in there, stocking orders or anything like that? Or is this truly reflective of the underlying procedure growth that you’re seeing? .

Filippo Caldini: Yes. I mean, I think — listen, this year, we made a very strategic focus on driving our direct markets. And we’ve really been successful in terms of driving growth in those markets. We’ve allocated resources from a supply as well as investment standpoint. We made some organizational changes, and you’re seeing the benefits of that. We’ve had 20% growth the last 3 quarters. Preserve is also helping to drive that as well as we increase the number of accounts. But in general, I would say that the demand across all our markets is fairly stable. And in terms of how we finished the quarter, I don’t think there was any — necessarily any stocking orders. It just sometimes what you’ll find in the distributor markets.

There is some different periods. It’s not always a straight line. It’s a little bit choppy in terms of that, but there was no efforts in terms of any type of additional inventory or stocking. It’s just really based on the demand that we’re getting in the marketplace, and it’s also based on the good execution. Raj in terms of phasing.

Rajbir Denhoy: No, I think that’s fair. I mean it’s — as Peter noted, there’s always some ebbs and flows in the distributor markets, in particular, based upon the timing of orders. But overall, demand remains very healthy across all the regions. And the direct markets, which we control ourselves, obviously, are doing very well right now. We’re executing at a high level.

Operator: The next question comes from Anthony Petrone with Mizuho.

Anthony Petrone: Congrats on a strong year. Congrats, Raj, on the transition and Cassandra welcome to the team if you’re on the call. So maybe just maybe around the horn globally. I know the macro has come up quite a bit. It seems a little bit better maybe on a 3-month to 6-month basis here when you think of the regions? And maybe just a quick recap, where do you see the underlying augmentation markets, U.S. and in some of the core OUS markets, thinking of Europe China, Korea? And then I’ll have a follow-up question.

Rajbir Denhoy: Yes, Anthony. The question is really on the underlying markets. I mean generally, the markets feel healthy right now. the U.S., for us, we’re growing at a high rate. So it’s — we’re kind of well exceeding what’s happening in underlying market. But as we’ve noted, there does seem to be some increased interest in breast augmentation procedures and I think a lot of that’s been driven by the activities we’re doing, certainly, but it does feel like the market in the U.S. is very healthy, and we hear that from surgeons as well with surgery schedules booked out and lots of interest. So overall, I’d say the U.S. remains quite healthy. Internationally, frankly, we’re seeing the same thing. In our distributor markets, you’ve seen north of 20% growth now for several quarters.

That, again, is pretty indicative of what’s happening on the ground and also with our share taking. And then in distributor markets, likewise, the demand seems to be quite good. China, you mentioned has been a market that we’ve highlighted as had some challenges. It’s taking a lot of focus of management in the company. We’re spending a lot of time with that distributor. And frankly, we’re seeing the results starting to turn a little bit. And so overall, I’d say the markets remain healthy for us, and you can see it in the numbers.

Anthony Petrone: That’s helpful. And then a follow-up would be on just the Establishment Labs mix. When you think of Preserve here coming in and obviously, good feedback, but also reconstruction. Where do you think, I guess, Preserve can be as a percent of total revenues once we get into the sort of ’27 to ’28 time range, can it eventually be 50% of, let’s say, U.S. revenues. And if that’s the case, what do you think the tailwind looks like to your gross margin? .

Rajbir Denhoy: Yes. I mean, Anthony, it is early still, right? So Preserve launched essentially a year ago in Brazil, it’s February of 2025, right? And the demand we’ve seen has been very strong. The U.S. globally, there’s a lot of interest. It is really I think caught the attention of surgeons. It fits into the way that they do surgery. A number of them are saying, why would I do surgery any other way. And so your numbers of getting to 50% are not outside of the realm of possibilities. I mean, I think we could see that kind of penetration. And to your point about what it does to our gross margins, the ASPs we realized for a Preserve case relative to a case that only uses the implant, it’s about twice the revenue for us as a company, and they are much higher margins.

So it is a tailwind to what you’re going to see on the gross margin side if that, combined with the ASPs in the U.S., what’s going to happen with recon. It just adds to a number of initiatives that are going to support the gross margins going significantly higher over time.

Operator: The next question comes from Sam Eiber with BTIG.

Sam Eiber: Maybe I can come back to the U.S. for just a second and Peter, get your thoughts on some of the momentum you called out in the early days of 2026. And then I guess where you think you are along this growth trajectory, ,is the long-term outlook for share gains still around the same goalposts that you’ve laid out in the past? .

Filippo Caldini: Yes. Thanks, Sam. We continue to have very strong momentum going into 2026. As I mentioned in the prepared remarks, there’s a lot of opportunity to continue to gain share in the accounts that we’re already in as we increase the utilization rate as the surgeons work through their scheduling. We’re also going to be continuing to add accounts, so like put more accounts on the top of the funnel. So that’s going to be significant drivers for us. As we mentioned also, we’re going to be adding up to 15 reps. And a bulk of them have already been brought on. We started that process. I think we mentioned in the last earnings call that we’re going to start that process at the end of last year. So we’ve had close to 10 reps join the organization so far, and we’re going to continue to bring those reps.

So that’s going to be a key driver for us, then you overlay the fact that we’re going to be launching Preserve and the strong performance that we’ve seen outside the U.S. But also in terms of the early experience, it’s creating a lot of excitement in the U.S. market. So that will continue to be a key driver for us in 2026. We’ll also — we’re expecting to get the smaller sizes approved in the first half of this year, depending on the FDA, but we’re very confident we should have that in the first half of the year. And that’s just going to really be the start of the super cycle of innovation that we mentioned before with the Recon indication, which we are expecting to be a key driver for us in 2027. Also looking at ERGO2, which will enable us to bring Mia to the marketplace.

So our plan is still the same. We expect to be a dominant share in the U.S. market. We’re on that path to get there. And I think that’s probably going to happen a little bit sooner than I think we originally planned just based on the strong momentum we’ve had so far.

Rajbir Denhoy: Yes. Sam, if you look at the guidance we’ve given for the U.S. for it to exceed 30% of our sales, it’s almost 1/3 of our sales will be coming from the U.S., if not more. in the second full year. So we’ve got a lot of momentum in the U.S. is going very, very well.

Sam Eiber: And then maybe just following up on the last point. Obviously, you guys have a lot of organic opportunities with minimally invasive and Recon. But maybe longer term, are there any gaps in the portfolio or maybe you’re looking at that you have this — the infrastructure now where maybe you could be adding additional capabilities to the portfolio? .

Rajbir Denhoy: Yes, Sam, it’s a good question. And I think it’s part of the reason for my transition into this global strategy role is that with the financial performance of the company in a very good spot. There are things like you’re describing, business development, go-to-market strategies, the way that we prioritize things in our portfolio of innovation that I can now spend more time focusing on, right, because there are significant opportunities as you’re describing to continue to expand what we’re doing and to really realize the potential of what this company has put into motion.

Sam Eiber: Congrats on the transition here.

Operator: The next question comes from Allen Gong with JPMorgan.

K. Gong: You touched upon it already in response to some other questions. But I’m just curious about the contribution you’re currently factoring into the 2026 guide from some of the pipeline products you have between small sizes and reconstruction I.s construction going to be more of a 2027 story? And how quickly can you really ramp that up once you get the approval since as you mentioned, you’re already seeded in around 200 hospital facilities.

Rajbir Denhoy: Yes. So on reconstruction, it is likely a 2027 and 2028 and beyond the story for us, right, because Obviously, it’s still with the FDA. We — nothing has changed the opinion that, that product is approvable and should be very soon. But then there is the blocking and tackling of simply getting into hospitals, right? It takes time to work through the VAC committees and to get on contracts and things, and that will take time. But what we’ve already done is we’ve seen strong interest from hospitals already. We’re already in a number of them. And there’s a lot of interest in recon getting to market and getting in the hands of a lot more surgeons.

Filippo Caldini: Yes, Allen, just to add to that, as Raj highlighted is the Recon, our expectation is that’s where we’re going to see the impact in 2027. So we’re not really considering that for 2026. And also, as you look at Preserve, I think we see a tremendous upside in those numbers. And I think we’ve been very pleased with the initial response, not only in the U.S. but outside the U.S., and I think that has the opportunity for upside for us in terms of how we drive the business this year.

K. Gong: Got it. And then just a quick follow-up on spend. When we look at 2024, we saw a pretty linear increase in spend to support the U.S. launch this year was a little bit bumpier talking specifically about SG&A, and it sounds like you’ve already put in a good amount of investment into the U.S. sales force expansion you previously talked about early on in the year. So just any color on the cadence of spending on the operating side throughout the year. Should we expect it to be a little bit more front half weighted and then a little maybe improvement in the back half and then maybe next year, we see a little bit of a step up to support reconstruction.

Rajbir Denhoy: I think your question is a good one. I mean you look at the overall spending for us. We talked about $195 million to $200 million. But if 1x is out noncash expenses and onetime things, that’s $175 million, $180 million in cash operating expenses, which compares to a number roughly $160 or so, right? So the increase is well below the $50-plus million of revenue expansion we’re going to see this year, right? So we are starting to see the significant leverage in the model playing out, and that’s going to continue in ’27 and beyond. Even the incremental investment to support the Recon market will be well below the opportunity that, that represents. And so again, that’s another source of leverage for us. As it relates to kind of the timing, it is not linear, right?

We do have certain expenses that hit at certain times. As the first quarter will actually likely be a little below trend and that it will pick up in the back half of the year. But we’re supporting a lot of the U.S. expansion early on and then it will continue to be leveraged over the course of the year. But it’s not going to be kind of flat every quarter, as you described. It will be a little up and down with the first quarter, perhaps being a little lower and then picking up in the middle part of the year in the back half.

Operator: The next question comes from Caitlin Roberts with Canaccord Genuity.

Caitlin Cronin: And congrats on all the new rules to all. As it relates to revenue guidance, anything to call out from a seasonality perspective this year, particularly as you ramp further in the U.S.

Rajbir Denhoy: So it’s a good question, right? Because the U.S., we do expect is going to continue to grow, right? So sequentially, we should be up in the first quarter, modestly right? It is a quarter where it’s usually a down quarter for the market overall, and then you’ll see kind of continued step ups every quarter with a very strong finish to the year in the U.S. Again, following normal seasonality. Internationally, it’s a bit more normalized because you’re not right, growing the same rate you are in the United States. And so overall, be that similar pattern where the first quarter is down. You see a pickup in the second quarter. It’s down a little bit in the third quarter, and we see a very strong finish to the year. But you do have the subtlety of what’s happening in the U.S. with the very strong growth we’re seeing overall.

Caitlin Cronin: Great. And then just one more. Just how many of your current accounts in the U.S., would you say are high-volume accounts? And then any color on kind of the average penetration within your accounts? .

Rajbir Denhoy: Yes, it’s a good question. I mean, when we started a little over a year ago, we did sign up a lot of high-volume, larger accounts, a lot of interest in the product that’s broadened out a bit. The 1,500-plus accounts we have now kind of span the spectrum of where we are. And I would say, while it’s hard to get exact numbers on penetration, we’re still quite low in a number of markets, and that’s based primarily on the timing of when these accounts came on, right? So account that’s been with us for 6 months or less, it’s going to be lower than one that’s been with us for a year. And so 2026, the story for us is going to be about continuing to expand the number of accounts that we have in the United States but also going quite a bit deeper into all these accounts. And that’s what’s really going to drive the results. There’s a lot of potential there. We’re still early in a lot of the customers we signed up over the back half of last year.

Filippo Caldini: Yes. Caitlin, just to add, we — that’s going to be a big focus for us in 2026. Obviously, in the beginning, you want to get as many accounts and the early adopters, I think we’ve really seen strong push where Motiva is a majority, if not almost all their volume. It’s really now the next phase is really enhance that penetration, and that’s a big focus for us. I think there’s a lot of opportunity in that area. I think in certain accounts we’re underdeveloped, now granted that’s going to happen over time as they work through their schedules. But as Raj noted, this is a key driver for our growth this year.

Operator: The next question comes from Mason Carrico with Stephens.

Mason Carrico: I guess, first, could you just talk about your expectations around China this year? What are you baking in there? Sorry if I missed it. And really, what do you view as kind of the key hurdles to unlocking that market, whether it be in 2026 or 2027 or a future year.

Filippo Caldini: Yes. Thanks. As we mentioned in the prepared remarks, and we’ve really communicated this in the last couple of calls. This is a big focus for us. And I think the start in China in terms of the distributor building out their commercial capabilities was slower than we would have liked, and we put a lot of focus in that area in terms of — around their organization in terms of some of the strategy and targeting different hospitals pricing and we’ve been very pleased over the last 6 months in the back half of the year that we’re seeing very good progress in terms of the sellout. So I think a lot of this work is really having an impact. And our expectations remain the same. This market is a very large market when we expect to have the same type of dominant share in China that we do it throughout the rest of Asia.

Mason Carrico: Got it. Okay. And with the longer Preserve this year, it seems like ASPs and the ASP should benefit. So I guess, how much of U.S. growth in 2026 do you really see coming from volume versus ASP expansion? Or I guess how do you think about that algorithm, that growth algorithm even moving into 2027? .

Rajbir Denhoy: Yes. I think, Mason, we’re still so early in the penetration in the United States that the majority of the growth is going to come from continued unit growth, right, if that’s how you described it, right? So continue to take share procedure volume, that is what’s going to drive the revenue. Preserve certainly going to contribute. We’re going to launch it here in the first quarter very soon. And it will play out over the course of the year. But for us, it’s still primarily about penetration into this market and taking share from the incumbents.

Operator: Thank you. That is all the time we have for questions today. I would now turn the call back over to Peter Caldini for closing remarks.

Filippo Caldini: Thank you, operator, and thank you, everybody, for joining the call today. We’ve made tremendous progress over the last 12 months. I think we’re in very good position to really capitalize and I think on a unique opportunity and the strength that we have, especially around our products and pipeline. So very happy with the progress and really appreciate everybody joining the call today, and look forward to talking to everybody in the future. Thank you.

Operator: Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.