And look, our gross margin is very important to us and we’ve got initiatives underway to bring the cost of our products down as we get to scale and also bring the cost of our instrument trades down as we go into next year, but we are also increasingly focused on adjusted EBITDA and progressing towards breakeven. And what you’ve seen over the last several quarters is that top line growth that we’ve gotten from the investment in new products, increasing surgical capacity has allowed us to get that operating leverage across our sales and marketing, G&A functions and that’s reflected in the improvement. So we feel good about that. In terms of OpEx as well, we do expect 2023 OpEx for the year to be mid-single digit up year-over-year. And we’re very pleased about the trajectory of the leverage that we’ve seen.
We’ll provide more color on the OpEx in 2024 once we provide the revenue guide because as I said earlier, our OpEx is going to be linear, our OpEx leverage is going to be linear to revenue growth.
Craig Bijou: Thanks for taking the questions.
Operator: Thank you. Our next question comes from the line of David Saxon of Needham & Company.
David Saxon: Great. Hi, Laura and Anshul. Thanks for taking my questions and congrats on the quarter. Maybe to start, I wanted to follow up on a previous question about utilization. So it looks like 3.8 cases per doc per – in the quarter. So just wanted to ask, where does that go longer term? Is the ceiling higher across any of the three products or are they generally the same? And then when you think about your surgeon champions or kind of higher volume docs, how long did it take them to ramp to their current levels?
Laura Francis: Yes, David. Thanks for the question. Happy to answer that. Our utilization has been staying relatively consistent, a little under four procedures per quarter. And a part of the reason for that though is how rapidly our surgeon numbers are increasing. So the denominator is increasing very significantly. As I said, I think it’s been 30% plus over the last five quarters at this point. And so what’s happening, and you kind of highlighted it is that those, what we call champion surgeons, those surgeons who have adopted our procedures consistently into their practices, their numbers are significantly higher than that. Whereas newer surgeons are going to be just starting out procedure, so they’re going to be bringing down that average.
So overall, we’re staying consistent even with 30% growth in the denominator of surgeons. So, for us that bodes very well for the business in the future with three different procedure types going forward and really just at the start in every one of these markets. So in terms of – in terms of SI joint fusion procedures, we’ve said this many times that a typical surgeon who has fully adopted the SI joint into their practice is doing around nine cases per quarter, is a little less than four than what you’re seeing in our numbers right now. So there is a significant opportunity to build that out. It does typically take two to three years in order for a surgeon to fully adopt to get to the level of procedures per quarter that you would expect. And then what you need to do is to add on to that, those surgeons who are dealing adult deformity procedures or potentially degenerative procedures with our Granite product pelvic fixation and then we’re just at the starting point right now on fragility fractures as well.
So those are on top of those procedures, too.
David Saxon: Okay, that’s super helpful. Thanks, Laura. And then just for my second question just on Granite and TORQ, by my math, the two combined are tracking and kind of the low-teens percent of revenue. Is that the right ballpark and where does that go longer term, especially with the shorter construct Granite coming out next year? I think that’s a much larger TAM. And then can you give any update on that launch timing? Thanks so much.
Laura Francis: Thank you. So we don’t comment, we don’t break out our different procedure types for sacropelvic solutions company. And so our primary SI joint fusion, our pelvic fixation, and our fragility fracture businesses are really all a part of those of that broader business that’s here. But in terms of your question, and I’ll get back, it really the size of the market opportunity overall. We’re targeting $0.5 million procedures per year approximately. So around 280,000 of those are primary SI joint fusion procedures. If you think about pelvic fixation, it’s another approximately 130,000 procedures a year and then the remainder are the trauma procedures. So if you want to think about the opportunity, those are the buckets that we’re going after, those are the sizes that we’re going after and we’re really just at the beginning of the journey with each one of these different areas.
But it does bode well for the future. Now I’m going to answer your question two on, we’re going to watch our next Granite extension. Thus far, we’ve just said it’s going to be 2024, but as you said correctly, our goal is to better penetrate the opportunity with short construct degenerative spine procedures. Currently, our Granite product, we’re already seeing our current Granite product being used in approximately 40% of those cases in short construct procedures. And so what we’re going to do is leverage our experience from these degen procedure where Granite has been used and work on expanding the Granite family. So introducing that new product in 2024 is, the target is to accelerate adoption across those 100,000 degen spine procedures that are part of the 130,000 number that I just gave to you.
The initial low hanging fruit, our – what are called F1, revision cases, we estimate those are around 20% of total degenerative procedures to the pelvis. I’m not necessarily going to talk any further on the breakout. But as I said, we’re really excited about the revenue potential for the expansion of the Granite implant system.
David Saxon: Great. Thanks so much, Laura.
Operator: Thank you. Our next question comes from the line of Dave Turkaly of JMP Securities.
Dave Turkaly: Hi, good evening. Can you hear me?
Laura Francis: Yes.
Dave Turkaly: All right. Quick one on some news that you had in the quarter. The press release you put on the Medtronic compatibility, I think it was with the CD Horizon, Solera rods. I was just curious, how many of the competitors out there are you compatible with and how do you think about that in terms of allowing you to continue to penetrate that market?
Laura Francis: Great question, Dave. So you may recall and may – or may not recall, we had actually sent out a press release, it was around 12 months ago already where we talked about having general compatibility with almost all rod systems that were out there with our Granite product that was a clearance with the FDA provided to us after quite a bit of testing to show that we were compatible. So in terms of the particular announcement with Medtronic, that announcement was more to provide additional safety and security to Medtronic surgeons that they could feel very confident using Granite with the Medtronic Solera system in their adult deformity cases.
