Hello. Good morning, everyone. Thanks for joining us today. I'm Eduardo Herdan. I'm part of the Morgan Stanley team. Today, I have the pleasure of being joined by Anshul Maheshwari, COO and CFO of SI-BONE. Before we begin, just need to do a little plug for our disclaimers. Please visit morganstanley.com/researchdisclosures. With that, let's start with the fun part. Anshul, thank you very much for being with us today. Before we dive into performance, let's start with the big picture question. Company has evolved a lot in the last few years. Could you maybe walk us through that evolution and talk through how you see your products and end markets today? Sure. Eduardo, thank you for having us. We appreciate being invited to Morgan Stanley. It's one of the best conferences we attend every year. In terms of how the company has evolved, you're right. If you go back to the start of the company, which goes back to 2008, 2009, we started as a single disease state company, which was addressing a known disease state with an SI joint dysfunction. We had to build the market, we had to build clinical evidence, we had to build reimbursement. We, by far, are the leading market share owner in the SI joint dysfunction space, whether it's on the surgeon side, and most recently, we've expanded on the interventional side. In the last six years, what we've done is we've gone from this one disease state, one product company, to a multi-product platform targeting the pelvis. Within that, we've built out a pelvic fixation franchise, which is with Granite. That was our first Breakthrough Device product, driving fixation and fusion at the base of deformity and degenerative spine procedures. More recently, two years ago, we launched our TNT product, which was our second Breakthrough Device. That was for pelvic ring fractures, for fragility fractures in patients, generally patients who are older with Medicare and poor bone quality. That was our second Breakthrough Device that we launched specifically targeting towards trauma. As we built that franchise, there were a few common themes there. One, it was understanding the biomechanics of these first products that were going into an anatomy that was facing a lot of load. Number two was your sacrum has one of the most poor quality bone, low density bone, in the human anatomy. Being able to drive fixation and fusion required a level of innovation that did not exist before SI-BONE came out. Number three was because we're going after an unmet need, it was all about clinical data. Then it was about establishing reimbursement. We built that core skill set over the last decade and a half, and what you're now seeing us do is take that core skill set and say, "What else can we do with it?" We are by far the market leader in SI joint dysfunction. We are becoming the standard of care in spinal public fixation. We are becoming a standard of care within fragility fractures with our TNT product. What you're now seeing is look at this as a compromised bone franchise, having had the expertise of fusing this low-quality bone in your sacrum. We are now starting to look at opportunities for patients that have osteoporosis, osteopenia. How can we come up with solutions that help drive fixation and fusion for the patients that suffer from those disease states, still staying within spine and interventional as the core call points? That is really important for us because we see a lot of unmet needs, areas where you have high failure rates, where we know our technology can improve patient outcomes because of a proven track record. Our product that we have been teasing everybody about for the last one year is this new TAM that we are going after, which actually takes into account all these learnings I just talked about, and is targeting a known failure rate in spinal fusion procedures. We believe this technology is going to have a very significant impact on our TAM. It is going to be a whole new TAM with the same call point that today works with us on Granite. Because it is a third Breakthrough Device, it is also going to have the potential for new technology add-on payment that we plan to apply for. That, assuming if it is approved, will go effective in October of 2027. That is our first product that is building outside of the pelvis. What we now have also is a pretty robust pipeline of opportunities that we are going after that extend beyond this TAM. Our expectation is, on a very good cadence basis, you will see us come out with new products that are targeting high failure rates in different procedures, again, within spine and interventional, at a pretty regular cadence of one to two new TAMs a year going forward. Awesome. That is all super interesting, and I certainly will ask a few more questions about the new devices and pipeline in a bit. But maybe before we go into that, let us dive into performance a little bit. You all have grown a pretty impressive 20% CAGR over the past five years, and you continue to have great updates, including this last quarter, that feel like they are going to keep pushing the company's growth. Could you maybe walk us through some of those updates and how you see them affecting the trajectory? Sure. We reported our second quarter earnings, and on a year-over-year basis, the worldwide growth was about 15%. That was versus a tough comp from last year. If you look at it on a two-year stack, you are looking at high teens growth rate on the top line. What was equally impressive was the 19% growth rate we had in our active physician base, with close to 720 physicians performing a procedure in a quarter for us. That was a record number of physicians that did a procedure for us. When you think about what we did, then we had profitability increase about close to 180% improvement in adjusted EBITDA. We were free cash flow - $300,000 operating cash flow positive as well, close to $1 million. All the metrics pointing in the right direction. What we are really excited about is all the other things that we did during the quarter that are going to set us up for a strong fourth quarter going into a robust multi-year innovation and growth acceleration cycle. Starting with working on the DRGs for Granite, which is our pelvic fixation product. That product had NTAP that expired in October of 2025. We had been working with CMS to get DRG reassignments for that procedure. What we did get, and it was finalized and it goes effective October 1st, 2026, is three new DRGs, which would increase reimbursement from anywhere between $20,000 on the low end and over $50,000 on the high end for procedures where Granite is incorporated as part of the procedure. That is going to be a really nice tailwind for the business going out. The second thing that we were really excited about was the work that we did with the FDA on this third Breakthrough Device. We did file the FDA application in June, and that gives us confidence about commercializing the product in the fourth quarter and potentially as early as October, do the alpha launch. That should be a really nice, exciting opportunity for us. Then we continue to make progress on two additional devices that we expect to go into design freeze at the end of this year with the potential to commercialize them in late 2027, early 2028. Our focus has been how do we transform SI-BONE from this single product, single anatomy company into a medical device technology platform where we can now start building technology platforms that have applications around a broad set of opportunities. Very nice. Maybe let us hone in on the install base for a second. I think you mentioned 1,700 doctors, 19% growth year-on-year. What do you think is driving the growth of your install base at that scale? Are there any specific areas of the business that are driving that growth more than others? Yeah. We are really proud of the physician base growth that we have seen, I would say, over the last five years. I mean, in 2023, we had less than 1,700 physicians do a case in a year, and we had over 1,700 physicians do a case in a quarter. A large part of that is an outcome of the innovation that we have done. Our innovation with Granite continues to attract more physicians into the fold for pelvic fixation. Our expansion into interventional continues to be a really good growth driver for us with an SI joint dysfunction. Our launch of our TNT product a couple of years ago continues to get strong traction, especially with the partnership with Smith & Nephew on the trauma side as well. What we did see is broad-based growth. You saw double-digit based growth across all call points, and that is really exciting because one of the hardest things to do is to build a customer base of our scale. We have done that, and now as we put out some of these innovative products, it should allow us to now translate that into higher density, so more cases per physician, because we are going after procedures that these physicians perform today and are aware of the challenges that these procedures pose that we can solve. Let us maybe talk about that a little bit more. I think you are essentially saying that you are thinking about utilization expansion within your physician base. How should we think of that evolution over time, and how do you look at it today? Because I think today we have not seen it, but I think you are expecting to see some inflection in the near term, correct? Yeah. From a utilization perspective, where we see an overlap today is physicians that do SI joint dysfunction. 25% of those physicians are doing another procedure type with us. Generally, it is doing pelvic fixation with Granite. Now, as we add more product, it will give us an opportunity to be able to do more cases with those docs, and that is what is really exciting for us. These new products should not only drive the density, but they should also allow us to continue to increase the physician base number as well. Because if you think about the physician base, there is going to be two levers to the physician base. The first one is you have some episodic physicians, those that use a product on an episodic basis, you have churn. Generally, within the SI joint business, where you are not regularly diagnosing patients. With this new product launch, because we are going after a procedure type that these physicians perform all the time in the spinal fusion side, we think you will be able to see a reduction in churn. That should allow you to drive just an increase in physician base to start with, because your denominator is not shrinking first to then grow. And then with these new products that we are putting out there, we do expect more physicians to adopt our technology. Today, Granite, if you think about the scope of Granite, there is about 500,000 spinal fusion procedures done in the U.S. Only 130,000 of those, let us say less than a third of those, end at the sacrum or go to the pelvis. Right? So that is the subset of physicians we are working with today. With these new products we want to put out there, we can go after procedures that are not ending at the sacrum or the pelvis. That allows us to also grow the physician base while also go deeper with the physicians who use us today. Right. Got it. Maybe pivoting towards reimbursement. I think you mentioned it a few questions ago that you had some great news with some new DRGs recently. Maybe can you provide an update or give a little bit more color on where you landed and how we should expect it to impact the business? Yeah. I'd say we've got multiple reimbursement tailwinds going on in the business. Let's start with the DRGs first. These DRGs will impact any procedure where Granite is used. You will be automatically be able to bill to these DRGs now. Unlike NTAP, which is only for Medicare and which is up to three years, these DRGs are more durable, and on a rolling basis, commercial will also adopt these DRGs from a payment standpoint. It really expands the opportunity for Granite, both across commercial and Medicare. That's a huge advantage. Now, when you think about how this will impact the business, it's going to impact the business in the following ways. Number one is we know biomechanically two points of fixation, so using two Granites on either side is the best way to get fixation and fusion. We think there should be an uptake in physicians that are doing two points of fixation because now economics is no longer a challenge. That's number one. Number two is you've got certain physicians, and generally on the commercial side, who'll be more selective in using Granite because of the reimbursement, because there was no NTAP for commercial. Yep. Over time, as commercial picks up the reimbursement of these new DRGs, that friction goes away as well. With some of the new sites that we're going after, you've got some pushback on the ASP, and we've been very disciplined in maintaining our ASP because we know we've been working on these DRGs. We think those opportunities will also open up for us because physicians do want to use the product. When you couple that with the clinical data that we have with PAULA, where we've demonstrated no screw loosening, no breakage of Granite, we're really well-positioned to accelerate the penetration of Granite within deformity and DeGen. That's on the DRG side with Granite, which should be a huge tailwind for us starting October 1st. But we think it'll have a more meaningful impact as you go into 2027 as the hospital systems and the healthcare systems get educated and update their own internal workflows to adopt these DRGs. The second one is this new product that we want to put out in the fourth quarter. That product is a Breakthrough Device. It has been grandfathered in because it's been a Breakthrough Device already and will be eligible for NTAP, which we plan to apply for. Assuming that's approved, that would be a new technology add-on payment that will go effective October 1st, 2027. That should be a really nice tailwind for our business there. You already have the NTAP for TNT of up to $4,000 for trauma procedures. You've got that as a nice tailwind extending into 2027. The last piece is on our SI joint dysfunction side. There is the proposal to increase the payments for ASCs and OBLs for 27278 and also for 27279 between $1,000 and $2,000. That would be a nice tailwind for that business, assuming it's approved, effective January 1st, 2027. There is also the proposal to have 27279 be eligible for office-based lab procedures. With the INTRA platform that we've built over the last three years, we're really well-positioned to service the OBL market and the ASC market for pain or surgeons. You've got TORQ and 3D that's very well suited for the ASC and outpatient office as well. A lot of tailwinds. It's very unique to have a company at our scale to have that many commercial tailwinds, new product tailwinds, and also reimbursement tailwinds. Yep. Maybe let's talk about new products. You mentioned your third Breakthrough Device. Maybe give us a bit more detail. What is the TAM? How is it different than everything you've done so far? What impact can we expect on 2027? Anything that you can give us? Yeah. I am not going to talk about the TAM yet. We have been deliberately quiet about the TAM opportunity or talking much about the product, mostly for competitive reasons. We will be able to talk about it once we get FDA clearance. Now, like I said, this is our first product outside of the pelvis. It is a whole new TAM. It is by far one of the largest unmet needs and an area of failure within spine fusion. If you think about our history, we have built our history on addressing some of the most challenging issues in any procedure, and this is no different than that. Like I said, what is exciting is it is after the same call point that today uses Granite. When we think about the advantages this product has vis-a-vis Granite, which has been a very successful product for us, it has been one of the fastest scaling products for us, is when we launched Granite, we had to build an agent network from a case coverage standpoint. We today have 300 agents that we work with that carry Granite. This product will have access to those agents. With Granite, we had to build our presence in academic institutions and also build our presence with physicians who are doing deformity and DeGen procedures. This product will benefit from that. Because it is a known challenge within spine, we have made sure that it fits the physician workflow. There is no real training requirement for this product. It is literally a tray review, which is what Granite is today. Granite is literally a tray review where you walk in, you show a physician the tray, they understand the workflow right away, and they want to use the product. That is a really exciting opportunity for us from that perspective, that you should see a much faster ramp for this product once we get to alpha and beta launch. Great. Maybe you have spoken about the Granite launch, but maybe can we talk a little bit about the INTRA product platform and how that launch has gone and how the interventional market is going? Yeah. We entered the interventional market about three years ago, and part of the reason for that was we've always worked with interventional, but more from a referral pattern perspective back to surgeons. We do know there is a subset of patients that are with interventionalists that they want to be able to treat. So three years ago, we started working with them on TORQ. It was a product that had been out since 2021, targeting towards surgeons. We started working with interventionalists on that. We actually launched our STACI study, which showcased the safety and efficacy of interventionalists using our TORQ product, and it had good, no SAEs reported, and it was actually really good outcomes. Since then, we've actually launched our INTRA platform specifically targeted towards interventionalists, and that platform actually has a couple allograft solutions, our INTRA X, our INTRA V, and most recently, we launched our INTRA Ti product that's targeting interventionalists that are in markets where reimbursement for 27278 doesn't exist or is not covered because of LCDs. That product's done really well for us. So as a whole, the INTRA franchise is doing really well for us. Interventional has been a key growth driver for us within the SI joint dysfunction phase. Surgeons still account for majority of the business, but we're seeing a really good adoption from an interventional standpoint. We basically use the same playbook that we did with surgeons, which is we wanted to become a one-stop shop, comprehensive solution set for surgeons. We started with the triangle, we added TORQ, and we've done the same thing with interventionalists. We started with TORQ, then we added a couple of allograft solutions. Now we've added a metal solution. Our focus is, how do you make it simple? How do you make it reproducible? How do you make it site agnostic? We've done that very successfully. Very nice. Any lessons learned that can be applied elsewhere as you maybe look to launch your third Breakthrough Device or any other products that are maybe in the pipeline? I think what you're going to see us do is you're going to see us launch products that actually incorporate all the lessons that we've learned. We know changing medicine is one of the most difficult things. We know people are looking for better outcomes. We know people are focused on healthcare economics. We know adoption accelerates when it's a simplified workflow. What you're seeing us focus on is we've got this significant, I'd say, a pretty substantial list of opportunities that we're going to go after where there's a known failure rate. We're going to be focused on solving them with unique solutions. We're not going to be a me-too product company. We're going to maintain our asset-light model. We're going to maintain our high ASP. We're going to focus on spine and interventional, and we're going to focus on making sure that it is within the workflow that they're used to. Yep. Understood. I think you teased this out at the beginning of the conversation, but what should we expect in terms of pace of innovation of new product introductions? Yeah. We earlier this year talked about this being one of the most exciting phases for SI-BONE as we transition from beyond the pelvis, and we internally call it super cycle, and we've externally talked about it being an innovation super cycle. What that entails is sort of looking at potentially at least if not one, two products a year at a regular basis, each of them targeting a new TAM as well, because that's really important. We will add incremental technology as we need, but what we're trying to do is build platforms that can have broader applications and that we can expand. For example, Granite was a platform with the 10.5mm Granite, larger diameter Granite coming out that was targeting deformity, and then the 9.5mm smaller diameter targeting DeGen. We did the same thing with the TORQ platform, which is we launched with TORQ. That was SI joint dysfunction with some application in trauma, then launched the iFuse TNT TORQ that was targeting trauma specifically. We did the same thing with interventional with the INTRA platform. So what you are going to see is it is come out with platform technologies and then continue to build new applications and new technologies within that at a pretty regular cadence. Got it. So maybe let us put it all together maybe in terms of we have spoken about a ton of tailwinds in the business from innovation, reimbursement. How should we think about growth going forward given all of these tailwinds that you have? Yeah. I mean, look, our growth over the last five years, if you look at our CAGR, was about 20%, like you said at the start of the call. We believe we are entering a very exciting phase of innovation where we want to be able to deliver strong, durable growth. I am not going to provide guidance at this point. We are not going to put out a long range plan on what that growth could be. But when you think about the durability of the tailwinds, whether it is the existing platform that will benefit from better reimbursement and continued adoption growth, when you think about the new technologies that we want to put out in the fourth quarter, when you think about the two additional technologies that we are starting to talk a little bit about that will commercialize in late 2027, early 2028. When you think about the commercial footprint, which will organically grow as we expand our own direct footprint, but also see leverage from our agent network on the spinal pelvic side, but also on the trauma side with Smith & Nephew. You have got the reimbursement tailwinds. These are all long-term durable tailwinds. So we feel really good about the setup that we have to accelerate growth, but then also to make sure that it is durable. How do you then take that durable growth and translate that into high gross margin dollars and expanded profitability and free cash flow? Understanding you're not going to give guidance on this podium, but anything that you can tell us on how we should think about 2027? I'm going to talk about 2027 when I get into 2027. Right now, focus is be heads down, deliver a Q3 that's strong, then focus on the new product launch in Q4. If you think about where consensus is, that should give you a good indication of where 2027 could land up. Okay, fair enough. Maybe as you think about gross margin and the gross margin trajectory, you have some new product launches. How are those going to affect your gross margins? Yeah, so let's start with the baseline. We have industry-leading gross margins at close to 79.5%, so we're really proud of that. That's actually come up since the last 18 months. It was sort of closer to 78.5%, 79%. So we've done a good job in getting gross margins up. Now, when we think about the next few years, what we've talked externally is gross margin sort of ranging in that 77%-78% range. Most of the impact coming from non-cash related gross margin implications, which is depreciation. When you're putting out new products, you're going to put out surgical capacity. That surgical capacity is going to hit your depreciation before you really see a ramp from a turns and asset utilization perspective in the outer years. You'll see some of that, but what's exciting for us is the operating leverage you can get in the middle of the P&L, despite giving up some of that gross margin, is quite significant. You should see a pretty significant drop through to the bottom line from an adjusted EBITDA standpoint, but eventually from an EBITDA standpoint and operating earnings standpoint. We're equally focused on, as we scale these new products, that you should have operational efficiency initiatives that will allow you to bring the cost of these products down because when you start a new product launch, your cost of the implants is much higher because it hasn't scaled. Yep. Over time, you make enhancements that get those costs down, too. My guidance expectation in the medium term of 77%-78% does not account for benefits from those activities that could drive upside. Got it. Eduardo, you touched on profitability, and SI-BONE is sort of in the unique position that not many med tech can say. You've had both high growth and emerging profitability at the same time, and usually there's a trade-off there. How have you been able to achieve both at the same time? I think for us, it starts with innovative growth. We've grown our way to profitability. If you look at our profitability and leverage trajectory, it's been pretty linear to our top line growth. There are certain unique themes about our business that we hold as gospel. Number one is making sure we have a differentiated platform that allows us to charge a premium ASP, that allows us to maintain our industry-leading gross margins. Because we are so differentiated, we can leverage this hybrid sales model, which allows us to get a lot of operating leverage in the middle of the P&L. You tack on, so that's what gets you to your profitability side. Then you tack on a focus on being asset light from a business model perspective, make sure we're not heavy working capital, heavy CapEx business model, which is what traditional spine's been plagued by. You can see that translate into pretty significant improvement on a free cash flow basis as well, and we've been able to demonstrate that. I think you'll see that continue to evolve. We've publicly talked about operating leverage being sort of in that 1.2x to 1.7 x, depending on where we are in the innovation cycle. But if you extrapolate that, you get a significant amount of dollars dropping to the bottom line over the medium term. Got it. Anything that you can tell us in terms of how we could think about long-term profitability? Like I said, from our perspective, I'm not going to give you guidance on where long-term profitability goes. But again, you think about the operating leverage in the business, the potential for durable, strong top line growth. You should be able to, and sort of a sustained gross margin base. You should be able to see a pretty significant ramp in operating profitability over the medium term. Perfect. I think maybe just with our last minute or two here, what do you think is the most underappreciated part of the story that you'd want investors to take away from SI-BONE? Yeah. I'd say, actually, there's a growing appreciation as we've talked to investors throughout this year on SI-BONE not being a single disease state, single anatomy company, and actually being a medical technology platform that's going after significant markets with several unmet needs. They're realizing the uniqueness of the platform, which is different from traditional spine. Like I said, it's a high ASP, high gross margin, less commoditized, high clinical evidence-based backed business that's allowing us to do things that are atypical of companies in our space. That is being able to inflect on profitability, continue to expand profitability, inflect on cash flow, expand cash flows, all while continuing to invest in growth. I think that's starting to resonate a little bit more with investors, and it will continue to evolve as they see these new products being put out there. Excellent. Well, thank you very much for taking the time. Thank you. We appreciate you being at our conference.