Ladies and gentlemen, thank you for standing by. Welcome to Treace Medical Concepts' second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Trip Taylor, investor relations. Please go ahead. Good morning, everyone, and welcome to our second quarter 2026 earnings conference call. Participating from the company today will be John Treace, Chief Executive Officer, and Mark Hair, Chief Financial Officer. On this call, John and Mark will discuss the second quarter financial results and 2026 outlook. We'll host a question-and-answer session following the prepared remarks. The earnings press release can be found in the investor relations section of our website at investors.treace.com. This call is being recorded and will be archived in the investors section of our website. Before we begin, we would like to remind you that it is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events and market trends, as well as our estimated results or performance, are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon currently available information, and Treace Medical assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. Please refer to our SEC filings, including our 2025 Form 10-K and our Form 10-Q for the second quarter of 2026, filed before the market opens today, August 7th, which can be found in the investor relations section on our website at investors.treace.com for a detailed presentation of risks. With that, I will now turn the call over to John. Thank you, Trip. Good morning, everyone, and thank you for joining us on our second quarter 2026 earnings conference call. We are pleased with our results in the second quarter, with our revenue growth rate improving sequentially and our focus on profitability generating stronger adjusted EBITDA and reduced cash usage over prior year. These results were driven by continued year-over-year case volume growth, which accelerated to high single digits in the quarter, and market share gains driven by increasing surgeon adoption of our comprehensive bunion portfolio and early impact of our expanding line of new technologies, now allowing us to tap into a broader range of procedures throughout the foot and ankle. We continue to focus on investing in growth initiatives to leverage this growing portfolio while driving improved profitability, positioning us for stronger growth expected in the second half of the year. As a result, we are raising our full year 2026 revenue guidance to be in the range of $204 million-$212 million, representing a decline of 4%-0% compared to full year 2025. This compares to previous revenue guidance of $202 million-$212 million. Importantly, this outlook assumes ongoing expected dynamics, including continued procedure volume increases and the lapping of the ASP mix shift dynamics related to our 2025 product launches, as we begin to benefit from our 2026 planned product launches. More specifically, this year, we expect to return to positive revenue growth in our seasonally strongest fourth quarter. Turning to our growth strategy. As we continue to prioritize penetration of the bunion market and maximize the impact of our expanded portfolio, we are focusing on three key initiatives. First, driving the adoption of our three new bunion systems launched in 2025 across our large customer base of over 3,300 existing surgeon customers. Second, to build upon our leadership position with Lapiplasty by advancing new technologies that appeal to existing and new surgeons. Third, continue to broaden our portfolio by launching new technologies, allowing us to address adjacent procedures performed by our existing surgeon customers, enabling us to grow wallet share and expand our addressable market. We continue to deliver these technologies through our sales channels that include our focused direct sales team, which accounts for approximately 80% of our revenue. Speaking now to our first initiative. Before reviewing our commercial progress, I'd like to briefly reiterate the strategic importance of the bunion technologies we introduced in 2025. We believe these new systems meaningfully expand our addressable market beyond Lapiplasty and Adductoplasty. Nanoplasty and Percuplasty expand our reach into the high volume osteotomy segment with differentiated 3D minimally invasive solutions designed to simplify adoption and deliver consistent three-plane correction. While our SpeedMTP system extends our portfolio into the large and attractive MTP fusion market, which overlaps with bunion pathology and is among one of the most common foot and ankle procedures performed. Across our large base of over 3,300 surgeon customers, we estimate Lapiplasty in recent years has captured around 25% of their bunion-related procedure volume on average. Our three new platforms are designed to address the remaining 75% of their procedure volume, creating a significant opportunity to increase surgeon utilization and drive long-term growth across the estimated 4.4 million annual U.S. bunion sufferers. Importantly, we believe our strategy is working, and this continues to validate our confidence in the significant opportunity ahead of us. Through Q2, approximately 40% of our Lapiplasty surgeon user base has already utilized at least one of our three new bunion systems since their launch in the third quarter of 2025. This builds upon the 35% utilization rate we reported in the first quarter of 2026. In addition, approximately 30% of the growing number of new surgeons who first became Treace customers by using one of our three new bunion systems have also used Lapiplasty technology, demonstrating a pull-through effect to Lapiplasty technologies from this new surgeon cohort. Turning to our second initiative, our core Lapiplasty franchise remains a key strategic priority. As the recognized leader in the lapidus fusion segment, which represents approximately 30% of the estimated 450,000 annual U.S. bunion procedures, we are continuing to invest in innovation to improve our existing users' experience, appeal to new surgeons, and extend our market leadership. We remain on track for a limited commercial launch of our next generation Lapiplasty Lightning platform in the fourth quarter of this year. Lightning features new 3D correction instrumentation and Speed TMT implants designed to simplify workflow, reduce procedure time, and enhance the surgeon's accuracy and their control over the 3D correction. Another key initiative for our Lapiplasty strategy is our focus on increasing surgeon adoption of our IntelliGuide technology, the industry's first patient-specific planning and cut guide system for Lapiplasty bunion and Adductoplasty midfoot corrections in the U.S. IntelliGuide reduces steps and save time, and is particularly valuable in helping surgeons with treating complex deformities and revisional surgeries with greater confidence and control. We believe the combination of our Lapiplasty Lightning and IntelliGuide PSI platforms provide a compelling and unique value proposition and can support further surgeon adoption and reinforce our category leadership in this key market segment. Turning to our third initiative. We continue to broaden our portfolio beyond bunions to allow our sales force to more fully service a greater share of our surgeon customers' overall foot and ankle procedures and product needs and grow our share of wallet. During the second quarter, we took an important step towards this initiative with a limited commercial release of our new SuperBite compression screw system. As a reminder, compression screws are a fundamental bone fixation technology utilized broadly throughout the foot and ankle. We continue to receive very positive feedback and encouraging early customer uptake from our early market release of SuperBite. SuperBite features an innovative self-drilling and countersinking design that can reduce, or in many cases, eliminate the need for pre-drilling, improving OR efficiency and simplifying the procedure. SuperBite, which we expect to fully commercialize this quarter, enables our sales force for the first time to participate in a wide range of incremental foot and ankle surgical procedures, from the forefoot to the midfoot and hindfoot, and these incremental SuperBite cases often utilize additional Treace products. Building upon our recent access into the midfoot and hindfoot fusion procedures facilitated by SuperBite, we recently completed our initial cases utilizing our HyperPlate XM dynamic compression locking implant technology. Fusions of these larger joints in the mid and hindfoot can be challenging and have associated historically with higher non-union rates. The HyperPlate XM's implant combination of locking screws and dynamic compression provides a highly stable construct with an anatomic shape designed to promote fusion in these larger midfoot and hindfoot applications. Consistent with our focus to provide innovative sterile instrumentation to make procedures more reproducible and more efficient, we developed and recently commercialized the GreatReleaseXM instrument. GreatReleaseXM is specifically designed to facilitate more efficient and thorough release of the soft tissues connecting these larger joints so that the joint surfaces can be accessed to prepare for fusion. In the fourth quarter, we plan to further strengthen this mid and hindfoot portfolio with the introduction of our new CartiBlaster powered joint preparation rasps. These single-use sterile packed rasps connect with the powered saw handpiece and are designed to speed up and facilitate thorough removal of the cartilage from these larger joint surfaces to effectively prepare them for fusion. We believe HyperPlate XM implants, GreatReleaseXM instruments, and CartiBlaster rasps, complemented by our SuperBite compression screws, present a differentiated problem-solving portfolio to help surgeons advance their outcomes in their mid and hindfoot fusion cases. In closing, we're pleased with the progress we made during the second quarter as we strengthened our leadership position in 3D bunion correction, advanced our portfolio, and increased our presence across the foot and ankle market. Our focus remains on unlocking the full potential of this broader portfolio while investing in our key growth initiatives. Looking ahead, our anchor position in the bunion market has presented opportunities to leverage our core capabilities into new procedural adjacencies and continue to more broadly service our surgeon customers. We will continue to develop innovative solutions to address our customers' unmet clinical needs, support our customers' outcomes with best in industry medical education, and service them with our direct focus sales team. As we execute this strategy, we believe we can drive sustainable long-term growth and create long-term value for our shareholders. With that, let me now turn the call over to Mark to review our financial performance. Mark? Thank you, John. Good morning, everyone. Revenue in the second quarter was $45.4 million, a decrease of 4% compared to the prior year period. The decrease was driven by lower procedure kit sales to stocking distributors and a continued mix shift towards lower priced, minimally invasive products. Excluding sales to stocking distributors, we sold more procedure kits in the quarter compared to the prior year period. Gross margin was 78.5% in the second quarter of 2026, compared to 79.7% in the second quarter of 2025. Total operating expenses decreased 8% to $50.6 million in the second quarter of 2026, compared to total operating expenses of $54.7 million in the second quarter of 2025. Second quarter net loss was $15.9 million, or $0.24 per share, compared to a net loss of $17.4 million or $0.28 per share in the second quarter of 2025. Adjusted EBITDA for the second quarter was a loss of $3.5 million, compared to a loss of $3.6 million in the second quarter of 2025, representing both improved leverage and profitability. Year to date, cash usage reduced by 57%, or $3.6 million when compared to the same period in 2025. Cash, cash equivalents, and marketable securities totaled $45.6 million as of June 30, 2026. Turning to our outlook for full year 2026. As John mentioned, we are raising our full year guidance and expect full year 2026 revenue to be in the range of $204 million-$212 million, representing a decline of 4%-0% compared to the full year of 2025. This compares to previous revenue guidance of $202 million-$212 million. We expect revenue declines to continue until our seasonally strongest fourth quarter. We believe revenue in the fourth quarter will largely be supported by accelerating case volumes, the annualization of the mix shift dynamics from last year's bunion product launches, as well as contributions from our 2026 product launches. We are updating our adjusted EBITDA guidance to be in the range of a loss of $3 million-$5 million for the full year 2026, as compared to previous guidance of a loss in the range of $4 million-$6 million. The company reported an adjusted EBITDA loss of $3.9 million for the full year 2025. In addition, we are reiterating an expected reduction in cash usage of approximately 50% for full year 2026 as compared with full year 2025. Supported by our balance sheet and available liquidity, we believe we are well-positioned to continue executing our strategic and growth initiatives for the foreseeable future. With that, I'll turn the call over to the operator to open the lines for questions. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We do ask that you please limit to one question and one follow-up. Our first question will come from Ryan Zimmerman with U.S. Bancorp. Your line is now open. Hi. Good morning, everyone. This is Izzy on for Ryan. Thank you for taking the question. John, just to start off, I was curious if you could spend some time just talking about the quarter-over-quarter improvements or changes that you saw in terms of volume and pricing, and whether or not either of these dynamics have improved with the new products that you've brought to market so far. Hi, Izzy. Appreciate that. Appreciate the question. Within the quarter, what we saw was greater penetration of our three new bunion systems that we launched in Q3 of last year. We went from 35% of our 3,300 surgeon base using those products last quarter to 40%, that was nice to see. We also saw some contributions from our limited market release of our SuperBite screw system, and that penetrated some new procedures. When you combine those two together, we accelerated our case volume growth. We talked about mid-single digits over the last couple of quarters. We were in the high single digits this quarter, so we were pleased with what we saw there, and that's pretty much what played out in the quarter that led to the result. Appreciate that. Thank you. Mark, as we think about the guide for 2026 and the step up for the seasonally strong fourth quarter, could you spend a little bit of time parsing out exactly how you're thinking of the pacing in third quarter and fourth quarter? Thanks for taking the question. Appreciate that. We're really excited. Just as what John said, that a lot of the strategies and the commercial strategies that we've been implementing last year with our new product launches, they've been successful this year, and we really feel like the trends are working according to plan. The way we see the second half of the year is for this continued strategies to continue to work, we'll see continued improvement in case volumes and more contribution from these new products in the back half of the year. Now, fourth quarter is always our seasonally strongest quarter. We've always seen that step up, sequential step up in revenue and case volumes from Q3 to Q4, there's really no changes there that we're anticipating that to occur again. We've seen it time and time again that that's what happens. We feel like we're well-positioned with the new products that we launched last year to benefit from, as well as the new products that we're launching this year to continue to drive more case volume increases. We're looking forward to the back half of the year. Thank you. The next question is going to come from Ben Haynor with Lake Street Capital. Your line's open. Good morning, gentlemen. Thanks for taking the questions. First off for me on the GreatRelease and the CartiBlaster. Can you share a little bit on how you see the addressable market sizes for those products? Sure, Ben. It's John. Thanks for the question. What we've talked about is when you look at the combination of SuperBite, the HyperPlate XM, and the CartiBlaster, the GreatReleaseXM platform, we think that expands our TAM by about $300 million on the U.S. side. That's basically the size of that opportunity that we're going after in this kind of midfoot and hindfoot portfolio targeting. Perfect. That's helpful. On the Lapiplasty surgeons that are picking up your other offerings, do they tend to gravitate towards one or the other, or are there any commonalities there? Also any commonalities on who you're displacing? First, at a high level, we've assessed we were, before we launched the three new bunion system, we were getting around 25% on average of our surgeons' overall bunion-related volume. As these new products have been driving into that customer base, what we're finding is, based on the surgeon's preference on the MIS side, they may not want to use a burr, and so they gravitate more towards Nanoplasty. That's one of our MIS systems. That's an IM implant, and you don't have to learn how to use a rotary cutting burr. There is a learning curve established with that. You have other surgeons that prefer to go the Percuplasty route. They want to use the burr or they've been using the burr ahead of time, so they choose that system. As for our SpeedMTP, we're just seeing very strong adoption of that across the board, across all fronts. It's an outstanding system. Very low profile, great low fusion plate with excellent stability and fixation. As the name indicates, it goes on very quickly. I'd say that's how the mix is playing out in our customer hands. Got it. Thanks for the call. Appreciate the questions and congrats on the progress. Thanks, Ben. Thank you. The next question will come from Rick Wise with Stifel. Your line is open. Thank you. Good morning, John. Good morning, Mark. John, maybe going back to your starting comments about, which I think is hats off to you and the team, but 40% of the base using at least one and 35% of the new docs pulling through Lapiplasty, et cetera, and obviously more products to come. I'm curious about what kind of competitive response you're seeing, what kind of competitive response we should imagine you might face. Obviously, you've got some tough competitors out there. How quickly can they imitate or replicate some of the innovations I'm sure you're bringing? Just what are the challenges ahead from that front? Good morning, Rick. Thanks for being here, and appreciate the question. I guess at a high level, we haven't seen a notable shift on the competitive landscape since last quarter. As you know, we have numerous companies that participate in the bunion space, some very large companies and a lot of smaller players. The way we see it, we just have these very high performing products in the segments that we play in. What differentiates us as well is we have this incredible onboarding for surgeons through our best in class medical education, our bunion masters training events. We get rave reviews. Surgeons tell us these are the best in the industry, the best that they've ever attended. Once the surgeons are trained, we give them the support of that highly trained, highly specialized sales team that really makes sure they can integrate and adopt these new products into their practice efficiently and effectively. We continue a very high pace of innovation, where we're iterating and innovating our current platforms and then launching some new platforms. We talked about several new launches that are going to affect the fourth quarter, and we have a very robust pipeline of future technologies coming beyond that we'll be excited to talk about at a later date. I think all those factors are helping us win in this competitive landscape, and that's the innovation formula we're going to keep driving. Great. Mark, to pick on you a little bit. I wanted to follow up on Izzy's excellent question. Maybe we can get a little more clarity. I heard what you said about fourth quarter strength on the revenue side. Are we likely to think that given all the new products and the uptake, that third quarter sales can be higher? This is a three-parter of clarification. You had an adjusted EBITDA loss of three and a half in the quarter, obviously better or less bad, if you will, than the first quarter. Just given the trends in OpEx, is $50 million-$51 million, your new quarterly OpEx run rate, is that the range? Therefore, the dream of getting to adjusted EBITDA, close to adjusted EBITDA breakeven in 2027, I mean, more credible in our minds? Thank you so much. Thanks, Rick. Let me start off, if I miss any element of the question, just remind me what I missed here. I think the first part of the question is our revenue, we feel good about the way we're positioned to benefit from our new products to have that nice step-up in revenue in our seasonally strongest fourth quarter. We plan for that every year. We want to ensure that our products are launched before that so our surgeons can benefit, we can benefit in that fourth quarter. We've done all those things this year as well. We believe that we're going to have that step-up in the fourth quarter. I'm going to take you back a little bit. We've been talking over the last several quarters, beginning last year, middle of last year, we did some restructuring changes. We've created some efficiencies in the organization. That process started last year, we're annualizing and benefiting from some of those cost reductions and expense changes that we implemented last year. We'll benefit throughout this year. We did better in adjusted EBITDA in Q2 this year versus last year on a lower revenue base. We believe that there is improved leverage in the system. We also had some restructuring charges that we took this quarter, meaning our work isn't done. We continue to look for efficiencies throughout the organization. We believe we can improve some of the leverage, some of the benefits to the bottom line. We want to do that in a way that's not going to hurt our investments into top-line growth, meaning we continue to invest in our great R&D program. That team is developing great products. We're continuing to invest in the commercial sales force to ensure that we've got the right top-line growth, commercial strategies in place. We can also do that efficiently, we continue to look for places to do that. Now, we did better in Q2 than what was anticipated. We feel really good about that. We're going to keep our heads down and keep doing what we've set out to do this year. As you think about adjusted EBITDA into next year, it's a little early for me to talk about next year, we feel very confident that we will have continued improvements. We have historically shown very strong positive adjusted EBITDA in the fourth quarter. We anticipate that we'll do that again this year, that we can be a positive adjusted EBITDA next year as we think about our growth trajectories and all these commercial strategies. Did I hit all your points, Rick? Yeah. Just want to make sure I'm understanding. I hear you on the fourth quarter revenue, of course. I want to make sure. Last year, third quarter sales stepped up over second, I want to make sure that we're all on the same page in getting it right for you on the cadence. The idea of a step-up in this year's third quarter, along the way to that seasonally strong fourth quarter, third quarter sales being higher than second, is a reasonable thought given everything that's happening. It's absolutely a reasonable thought given the step-up in our case volume increases, what we're seeing. That's the way we've thought about the quarter, the trajectory, the cadence throughout this year. Yes, we will have a step-up in the third quarter versus Q2. That's the way we're thinking about it. That's what we believe will happen in anticipation of that stronger fourth quarter. Yes. Perfect. That's great color. Thanks to you both. Good to see the progress. Thanks, Rick. Thank you. The next question's going to come from Richard Newitter with Truist. Your line is open. Hi. Thanks for taking the question. Wanted to just ask a little bit on the environment. We're pretty much through 2Q earnings here. We've seen ortho players report their results. There's probably been some normalization. There's been some fears of elective procedure slowdown, ACA subsidy expirations. Can you guys talk a little bit about obviously, you made progress in the quarter. You're raising your guidance. You guys have some pretty idiosyncratic things going on, too. I'm looking for some color on what you're seeing in the elective procedure market. You guys have a mixed exposure, too, that would be particularly insightful to kind of get a feel for whether or not there's any kind of step function change coming. That's point one. Maybe just within the context of we're in bunion season or heading into bunion season, do you get the feel that bunion season is on track to be consistent with what normally plays out, or is there hesitancy? That's question one, and then I'll have a follow-up. Yeah. Hi, Rich. Thanks. It's John. Maybe I'll take a shot at this question, and Mark can clean up on anything I missed here. We talked about the continued year-over-year case volume growth. We talked about the acceleration we saw into high single digits in the quarter. We believe we're gaining market share. We're getting more adoption on these products. To date, I would say the underlying trends have kind of tracked with our assumptions that were built into our 2026 guidance. With more new products coming and impacting things in the back half of the year, like SuperBite and the new products we talked about, we can tap into incrementally more elective cases that are outside what is going on in the bunion market specifically. With regard to some of the other commentary, ACA enrollment, et cetera, we're aware of that and the discussion around the impact on some elective procedures. I'd say at this point, we haven't seen a material impact on our elective patient demographic. We do have a pretty high percentage of our patient demographic that's commercially insured, and maybe that's playing in there. That's how I would sort of frame things right now from where we see things today. You're not hearing anything from your customers. There's nothing that's suggesting that there's change coming or anything overly alarming. We have not heard anything of material impact from our customer base. The summer season is typically softer for bunions in general, that's just been our normal seasonality, or at least how it's played over the last few years for us. Nothing material that we're hearing from our customers that's making this sound like a much different summer season. Okay, that's helpful. Just looking at the consensus for 2027, I know you're obviously not going to guide to 2027, but your jump-off point is a nice growth trajectory for 2026 implied by the guide. Is there any reason why you wouldn't be able to sustain, on a full year basis next year, a, call it, high single-digit growth trajectory? That's roughly where the consensus is, and I'm just wondering if you could kind of opine on that at this point, whether you're kind of comfortable with that consensus being in that arena. Thank you. Rich, this is Mark. Appreciate the question. We feel really good about the way we plan to exit this year. It should be much stronger growth rates. We're pleased. We're looking forward to that fourth quarter. A lot of the headwinds, and we talked about some of the dynamics, the mix shift, a lot of these things begin to play out, so we expect some of that benefit to come in the fourth quarter. We definitely plan to have a different trajectory as we go into 2027. It's going to be a little bit early right now before we lock in what that range is going to be. We feel really good as we exit this year that we'll have some wind in our sails, and as always, there's going to be some different quarters and challenges to overcome, but we're going to feel really good about the fourth quarter. I think for now, we just want to keep our heads down. We want to execute on the fourth quarter, we'll give a little bit more color about what kind of growth rates we think we can have for next year. We're excited about what this year will bring. Thank you. Thank you. The next question will come from Lily Lozada with JP Morgan. Your line is open. Hi, good morning, everyone. Thanks for taking the question. Maybe just one from me. I was hoping you could talk a bit more about price. I know some of the new MIS osteotomy products come at a lower ASP, but at the same time, you've been adding a lot of new products to the bag. What does that all mean for average procedure price moving forward? How far through the mix headwind from the new MIS osteotomy products are you? Thanks, Lily. Yeah, we continue to have that mix dynamic, ASP mix dynamic, and that's going to play through Q3 where we've launched these products last year. We're seeing kind of what we expect on our trends there when we look at an average blended selling price on these products. As we launch things like SuperBite, you have two different places those go. Sometimes SuperBite screws go into our existing Lapiplasty, Adductoplasty procedures where they're an add-on sale, and they may be a $500 or a $1,000 or a $1,500 addition to a case like that. They can be used standalone, and that may be a case that varies between $500 and, call it, $2,000. When you get into cases more in the back of the foot, sometimes these combine multiple technologies. You have SuperBite screws, you have our Speed Plates or our forthcoming HyperPlate. You have some of our biologics involved, and these can be $5,000, $10,000, or even $15,000 cases. There's really a pretty big blend of the way some of these new platforms are going to roll out that are going to, I think, average out together to be pretty nice for us. Just overall strengthen our portfolio, strengthen our surgeons' relationships with their reps, and get our sales reps called into a lot more cases during the third quarter and in the fourth quarter this year than they maybe were last year. We're excited about that. Great. Thank you. Sure thing. Thank you. I am showing no further questions in the queue at this time. This will conclude today's conference call. 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